7 months ago, I blogged about whether Aspial’s 5-year, 5.25% bond has sufficient margin of safety. 7 months later, Aspial has launched a new 4-year, 5.30% bond. Since the last blog post 7 months ago, has Aspial’s financial strength improved based on the 2 criteria that Benjamin Graham used to analyse bonds, namely, the minimum average earnings coverage and the minimum current stock value ratio? Using Aspial’s latest Financial Year’s results, the computation of the 2 ratios are as follow.

Earnings Coverage

Profit before tax = $13.0M
Adjusted for:  
– Deduct: Share of results of associates = $1.8M
– Add: Non-recurring forex loss = $10.0M
– Add: Finance cost = $20.4M
Total earnings available for covering fixed charges = $41.5M
Current finance cost = $20.4M
Add: Interest of proposed bond = 5.30% x $75.0M
  = $4.0M
Total finance cost