A STELLAR and MUST READ follow-up post from Dan......
Thanks Dan for letting us share this GEM.....
I really wish that people were required to take a financial accounting class to get a degree of any sort, not just Finance or Accounting, because it is not an intuitive art by any means, but it is extremely important to be able to understand financial statements.
Assets = Liabilities + Stockholder equity, always, this is accounting law.Every Balance Sheet must BALANCE. It is a proof in Accounting similar to a^+b^=c^ in Geometry(The Pythagorean Theorem), it is always true.
The Debt to equity Ratio of Mexus is 1,300,000 debt/ 35,700,000 stockholder's equity = .0364 or 3.64% Debt to Equity Ratio
The Debt to Equity Ratio of BHP Billiton is 59,812,000,000 debt/ 64,768,000,000 stockholder's equity = .923 or 92.3% Debt to Equity
The Debt to Equity Ratio of Fresnillo is 1,514,000,000 debt/ 3,858,000,000 stockholder's equity = 0.392 or 39.2% Debt to Equity
We're in a good position financially. Once gold is being produced any bank with a single brain cell would easily give us $10,000,000 in credit for short term expenses even if the share price remained exactly the same. Realistically once production starts we will be closer to a $200,000,000 Market Cap than a $37,000,000 Market Cap and any bank with a brain cell would easily give us a $50,000,000 line of short-term credit since we have, essentially, no debt. I doubt that we'll use a line of credit though unless we use one to start up the second and third mines at a faster pace once the first mine is in full production. The credit will be there in the future if we need it though because banks want to be in bed with proven winners, like Mexus.
TLDR; Mexus Debt to Equity Ratio = 3.64%, Fresnillo Debt to Equity Ratio = 39.2%, BHP Billiton Debt to Equity Ratio = 92.3%. We're in a good position financially.
