|Quoting NAV20 (Reply 69):|
I can only conclude that you don't understand business, Cygnus. They need their cash balance to fund work in progress. Do you spend your whole salary the day you receive it?
You can probably google this, but let me make it easy for you help you out, NAV:
- Cash on hand, cash position, or, in EADS' case "Cash and Cash Equivalents" is $6.5bn euro. This is basically, to use an example, like the combined money you have in your checking account, your wallet, your piggybank, and some types of savings account. It refers to money they can pay some, right now, if they needed to.
EADS uses the IAS7 definition “cash equivalents are held for short-term cash commitments […], must be readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value. Therefore, an investment normally qualifies as a cash equivalent only when it has a short-term maturity of, say, three months or less from the date of acquisition.”
- Over and above this money, they also have other money. This is like money you may have in CDs, equity in your house. You have the money, but you can't really do anything with it immediately.
Now, with 6.5bn euro in cash and cash equivalents, EADS is in one HECK of a strong position. On top of that, their fabulous deliveries is adding about 1.2 bn Euro in cash from operating activities every years. Of course, they have some expenses - by some things, sell some things.
|Quoting Astuteman (Reply 71):|
Despite this, and God only knows how many exceptional payments they've had to make, there was no discernible cash outflow from the parent organisation in the first 6 months of this year (which is pretty remarkable, really).
Not to nitpick, but they did spend 1.4bn euro cash on securities (I assume this was part of the BAE repurchase), so their net cash position did deteriorate. But it's definitely not "bleeding" and "dire straights" for Airbus (as some would hope) as their operations seems to be extraordinarily healthy and profitable