Balfour Beatty (BBY) - is this their net debt? - newbie

adamt

Hi,

Being new to trading and as my first trade i am considering buying Balfour Beatty (BBY)

Ive gone through their financials and they all look positive, BUT i have had great difficulty finding their Net Debt , but i think i have finally found it, and it stands at:
£3,216m
- http://www.advfn.com/p.php?pid=financials&symbol=bby&cb=1254993475

This seems very high considering their profit is £270m, and Market cap - £1,475m.

Everything else is positive, its just this huge 3billion debt putting me off.

Is this the correct figure?
if not how on earth do i find the latest net debt , ive searched everywhere, and all the sites word it differently, its confusing.

I am planning to start off small and invest £1500 into BBY

P.S. im very new to trading as you can tell.

thanks

mutley74

BBY shares were down this morning by about 9% ....not sure why but i thought was good long time buy at 315p....

turbobob

Don't seem to be many takers for this topic. What are you trying to find out about the company?

I'm not really that great on fundamentals but have limited knowledge. According to a few sites, net debt is defined as total debt less liquid assets (cash).

The figures for liabilities for BBY from Digital Look are:
Current liabilities (short term): £2809 million (of which £12m are categorised as borrowings)
Non current liabilities (long term): £870 million (of which £154 million is classed as borrowings)
Total liabilities: £3679 million

Cash: £463 million

Net debt: £3679 million - £463 million = £3216m (the figure on ADVFN)

Liabilities is money owed to creditors, but its not quite the same as borrowing money from the bank. For example the company could have a lot of short term credit with suppliers. The borrowings figure is where any loans would be I think.

It might be helpful to compare this company against others in its own sector, to see whether others are similar.

E.g here http://www.advfn.com/p.php?pid=sectorsheet&btn=&country=uk&sscf=uk&sector=14&sort_by=0&sort_ord=A&symbol=

adamt

thank you for explaining,
i think i will avoid BBY as the debt is just to high risk.

turbobob

Catching a falling knife is always high risk anyway I guess todays price movements were to do with a rights issue being approved?

Sceptic001

...or maybe this? Another $626 million to add to the debt pile.

withnell

You can't compare their debt against eg a software company - you have to compare to a similar industry company. Some companies are more finaced by debt than shares, some the other way. Also net debt as of the financial statement date (which for many companies will be as at Dec-08) could, and will, have changed