Bombardier (BBD/B CN): Accounting Wizardry

Sell Bombardier: Core EBIT Fell, Core Cashflow Is Negative, Covenants Maybe Under Stress

Analyst

Alasdair Moody

Exposing Creative Accounting

Bucephalus Research Partnership

Bucephalus Research Partnership Limited. Exposing Creative Accounting.

At the Bucephalus Research Partnership (BRP) we analyse financial statements using our accountant's practical experience and our own quantitative algorithms for corporate governance, accounting risk and peer performance.

Our thematic research refines our unique algorithms while our single stock research focuses on examples where we discover a significant gap between published accounts and business reality.

​Bucephalus Research Partnership:
- Is an independent fee-based research service
- Does not take proprietary positions, long or short
- Does not solicit business or fees from the corporates we review

Forensic Accounting

Bombardier is our North American poster child for creative accounting. It scores very badly on each of our Governance, Accounting risk and Peer performance metrics and has one of the highest (worst) scores, 226, in our universe. Bombardier needs to spend to survive but negative cashflow means it is borrowing to fund its finance costs. Ever more desperate deals will not save the company. Worst case scenario, the debt holders take a haircut, best case, equity holders only lose 65%.The questions…

Bombardier is our North American poster child for creative accounting. It scores very badly on each of our Governance, Accounting risk and Peer performance metrics and has one of the highest (worst) scores, 226, in our universe. Bombardier needs to spend to survive but negative cashflow means it is borrowing to fund its finance costs. Ever more desperate deals will not save the company. Worst case scenario, the debt holders take a haircut, best case, equity holders only lose 65%.The questions…

Bombardier Inc

Bombardier: Flying on Fumes