United has 30 days of cash???

[samballs]

Source: United Ticket agent in Denver

You're one of those people that listen to mang and vote yes for concessions, because mang said if you don't you won't have a job tomorrow..

 

[Lear70]

The gate agent is technically correct in that United has about 1 month CASH.

This is a problem of "a little bit of information can be a dangerous thing"

United had 1.2 billion in CASH at the end of the 3rd quarter of 2007. United had about 5.0 billion in "cash, cash equivilants, restricted cash, and short term investments"...which is not the same as CASH. United's monthly expenses for the 3rd quarter was about 1.6 billion which gives United about "a months worth of cash"....in other words...if United didn't sell one more tickets...they would be able to cover probably 3 weeks worth of expenses with the cash they had on hand.

Cash is one of those things that once you reach a certain point it's actually a bad thing for a company to have too much cash on hand. Clearly, UAL management decided that the right balance was to have 20 days cash (quick estimate) and anything more than that, up to about 3 months worth in other short term investments, restricted cash, etc.

Since you seem fairly new to these types of concepts...

Pretend this was 10 years ago when on-line banking didn't blur the lines between a savings account and a checking account.

If someone personally had $5,000 a month in expenses and they had $5,000 in their checking they would probably feel pretty comfortable. If they had $15,000 (3 months expenses) in their checking account making 0% interest...they would be a fool. You could easily make 3.5%-4.5% in a savings account on $10,000 and have plenty of time to transfer your money into your checking account if something unexpected came up. If you had $5,000 in cash (checking) and $200,000 in your savings account you would be equally (probably even more) foolish...Keep $5,000 in your checking...$15,000 in a savings account and take the $180,000 and invest it in other things like maybe buy some real estate or open a new business...whatever.

United has made the decision with this type of mindset.

So YES...United only has 20 days CASH...but NO you shouldn't plan that vacation in Aruba for January.

Good luck

Wow. I'm impressed.

That was a very quick, accurate, and easy-to-understand explanation of some very complicated concepts in senior executive money management issues.

Que Bueno! :thumbsup:

 

[PCL_128]

Source: United Ticket agent in Denver

Well, there's your problem. If you want the real scoop, you'll have to talk to the guy who changes the blue juice.

 

[737 Pylt]

"Instead of listening to a ticket agent" ,you say?? Sorry,but I have no choice. I married one!!


PHXFLYR

And they call him HPilot.......:laugh: :laugh: :laugh: :laugh:

737

 

[BILL LUMBERG]

I think I read somewhere on the net (so that ALWAYS makes it true) that Ray Neidl (another blowhard analyst from Calyon) said he's advising his people to stand down from the merger idea because a company looking to merge wouldn't be paying out stockholders, they'd be hoarding cash to sweeten the deal.....he observed long term liquidity adequate for the oil spike and mild downturn in the economy.....if they had little cash left, it would have been duly noted.....

 

[SkiFishFly]

The gate agent is technically correct in that United has about 1 month CASH.

This is a problem of "a little bit of information can be a dangerous thing"

United had 1.2 billion in CASH at the end of the 3rd quarter of 2007. United had about 5.0 billion in "cash, cash equivilants, restricted cash, and short term investments"...which is not the same as CASH. United's monthly expenses for the 3rd quarter was about 1.6 billion which gives United about "a months worth of cash"....in other words...if United didn't sell one more tickets...they would be able to cover probably 3 weeks worth of expenses with the cash they had on hand.

Cash is one of those things that once you reach a certain point it's actually a bad thing for a company to have too much cash on hand. Clearly, UAL management decided that the right balance was to have 20 days cash (quick estimate) and anything more than that, up to about 3 months worth in other short term investments, restricted cash, etc.

Since you seem fairly new to these types of concepts...

Pretend this was 10 years ago when on-line banking didn't blur the lines between a savings account and a checking account.

If someone personally had $5,000 a month in expenses and they had $5,000 in their checking they would probably feel pretty comfortable. If they had $15,000 (3 months expenses) in their checking account making 0% interest...they would be a fool. You could easily make 3.5%-4.5% in a savings account on $10,000 and have plenty of time to transfer your money into your checking account if something unexpected came up. If you had $5,000 in cash (checking) and $200,000 in your savings account you would be equally (probably even more) foolish...Keep $5,000 in your checking...$15,000 in a savings account and take the $180,000 and invest it in other things like maybe buy some real estate or open a new business...whatever.

United has made the decision with this type of mindset.

So YES...United only has 20 days CASH...but NO you shouldn't plan that vacation in Aruba for January.

Good luck

excellent post!

 

[PHXFLYR]

Man,that was a great post. Even a moron like that Delta career F/O "737 Pylt" can understand what your talking about !!

PHXFLYR