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Whether you're walking a tightrope or scribbling in your checkbook, balance is a good thing. And, one of the best ways to evaluate a company is to glance at its balance sheet to see what it owns with what it owes.
The balance sheet is a paragon of simplicity and is made up of three components: assets (the stuff it owns), liabilities (the money it owes), and shareholders' equity (the company's value to its shareholders).
Assets take two forms: short-term (or current) assets and long-term assets. Under short-term, there¿s good ol' hard cash. Then, there¿s something called "cash equivalents," which are assets like short-term bonds that can be sold so quickly, they might as well be cash. There you factor in inventory, which (if you're a reasonably competent business owner) you can sell to customers in return for--you guessed it--cash. (The raw materials a company owns to make that inventory also falls under this category.)
Long-term assets are things that are harder to convert into cash. (Think real estate and equipment.) Long-term assets depreciate, meaning they lose some value over time. Also under the long-term category are what's called intangible assets: things like patents and brands, that are important, but hard to quantify. Accountants earn their stripes figuring out the real overall value of these assets.
Once you know your assets, it's time for liabilities. As with assets, liabilities are separated into short-term or current, and long-term. Current liabilities are what a company owes in that year: Things like payments to employees or accounts payable to suppliers. Long-term liabilities are debts paid over several years.
Shareholders' equity is determined by subtracting the liabilities from the assets. That number represents the value of the company after all its bills are paid.
Obviously, investors should pay close attention to balance sheets. Spikes in the amount of debt carried, or a reduction in shareholders' equity, are usually red flags.
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Wednesday, May 14, 2008
Verso Paper Corp. Sets Price for Initial Public Offering
Comtex
MEMPHIS, Tenn., May 14, 2008 (BUSINESS WIRE) ----Verso Paper Corp. (NYSE:VRS) today announced that the initial public offering of 14,000,000 shares of its common stock has been priced at $12.00 per share. All of the shares are being sold by Verso Paper. In addition, Verso has granted the underwriters a 30-day option to purchase an additional 2,100,000 shares of common stock. Verso intends to use the net proceeds from the offering to repay a total of $153.3 million of debt and related prepayment fees. The debt to be repaid by Verso consists of the $4 million outstanding under the revolving credit facility and the $10 million outstanding under the senior secured term loan of Verso Fiber Farm LLC as well as $137.9 million of the $250 million outstanding under the senior unsecured term loan of Verso Paper Finance Holdings LLC and a related $1.4 million prepayment fee.
Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc. acted as joint bookrunning managers for the offering, and Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and Utendahl Capital Partners, L.P. acted as co-managers.
A registration statement relating to the offering was filed with and declared effective by the Securities and Exchange Commission. The offering is being made solely by means of a prospectus. A copy of the prospectus may be obtained by calling toll-free Credit Suisse Securities (USA) LLC at 1-800-221-1037 or Citigroup Global Markets Inc. at 1-800-851-9146.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy, and there shall not be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Verso Paper
Based in Memphis, Tennessee, Verso Paper is a leading North American producer of coated papers, including coated groundwood and coated freesheet, and supercalendered products. Verso's paper products are used primarily in media and marketing applications, including magazines, catalogs and commercial printing applications such as high-end advertising brochures, annual reports and direct-mail advertising. Additional information about Verso is available on our web site at www.versopaper.com.
SOURCE: Verso Paper Corp.
Verso Paper Corp. Robert P. Mundy, 901-369-4185 Senior Vice President & Chief Financial Officer robert.mundy@versopaper.com
Copyright Business Wire 2008
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