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Solvent = having enough money to meet ones liabilities.
Insolvent = unable to pay ones debts as and when they become due.
All the rest in gobbledegook.
If they had listened to the "over the back fence" gossip = "we can't make it pay on that revenue, so we reckon the Emperor may not be wearing any clothes", then HIH and many of the ever growing parade of "household names" may not have fallen victim to the "modern" = "we've found another way to confuse everyone for long enough to maybe
trade out of this mess" accounting methodology. Some of the larger failures in times past, have just plain lied. The analysts in all cases had been barking for some time.
And the "gossip over the back fence" was wrong about Impulse too.
I've seen enough dog and pony shows and the results over the years to know that when someone starts on the "sensitivity analysis and goal congruence" routine, my BS Detector slips straight into overdrive.
And then when they invariably add "you won't understand the mathodology (correct spelling), trust me", I reach for my gun.
Don't start me on derivatives either.
Oh and BTW, NPV and DCF are the same measure in different disguises.
A dollars a dollars a dollar the only difference in value is at which point in time it is measured. And if you are going to rely on making your profit in trading against it then you had better be as good a currency trader as you are an airline.
The AirNz analysts really got it right when they bought Ansett hey
So much for their accounting mumbo jumbo.
I suspect Mr Toomey, coming from a highly disciplined Qantas environment, must have had that really sick sinking feeling you get when he peeked over the yawning abyss, that must have be Ansetts accounts after the share price doctors had been at them. As I recall he went very quiet for a long while after he got there.
If the financial press reports of their current "burn", to use one of the modern weasel words for "losing money" are correct then it doesn't matter whether your goal congruence was positive or negative you eventually run out of it = insolvent.
Unless you can find a "white knight" you go the way that every one else does in business when they get it wrong more often than not. Backwards out the door.
Now tell me that their shareholders deserve different treatment!
Annual Reports, audited? we are in dangerous waters here.
The tragedy is as always is that the loyal and hard working staff are the victims of the financial gobbledygookers.
[This message has been edited by gaunty (edited 05 July 2001).]