Comment 39381

By zippo (registered) | Posted April 01, 2010 at 12:02:09

RTH Staff:

I am pretty sure you made an error, or are at least unclear, when you said in the story:

"they are not meeting their debt-to-income ratio of 1.25:1 (i.e. they need to earn $1.25 in income for each dollar of debt)."

The "DTI" is normally defined as the ratio of debt servicing costs (i.e. the monthly payments) to income NOT the total debt to income.

There is another ratio, the "quick ratio" also known as the "acid test" which is the ratio of liquid assets to short term debt and other liabilities which might also be what you are referring to?

Anyways, it does not matter much I suspect in this case. Much as I'm behind the "Dragon" idea on the community and social level, and I do what I can to purchase from them and support in other ways my sense is that, in accounting terms, their financials "suck like a Hoover" (sorry, that's another technical term) at the present time and nothing I heard at the meeting indicated a cogent plan to change that.

Hint: Some wide eyed dude going on about "it's capitalism free coffee! no capitalism at all!" (at the meeting) is not helpful! Unless the intent was to scare any actual potential investors who might have been there out of the room.

Are they "dead", No, but they are in the ICU and the machine that goes "ping" is running on batteries from the "Dollar Store". Hope they can get it together, I'd much rather be drinking a cold one there next year than bringing flowers to the funeral.

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