The Prada Clean Up

here is more from the same article from www.dnrnews.com

“We have posted strong results for the first six months of 2005,” said Bertelli. “With sales, margins and overall profitability on the rise, I am confident this year will be positive for Prada as our priority remains increasing efficiency in all parts of the value chain. “Looking back, I believe that 2004 can be characterized as a transition year for the group,” he said referencing Prada Holding’s 2004 net loss of 61.96 million euros, or $75.2 million. For the first half of 2005 figures, Prada SpA Group’s earnings before interest, taxes, depreciation and amortization jumped 23.3 percent to 97 million euros, or $117.8 million, for the six months ended July 31. Sales advanced 5.6 percent to 659.2 million euros, or $800.2 million. Net bank debt totaled 605 million euros, or $734.4 million. That figure is set to drop to 549.6 million euros, or $667.2 million, by the end of next January. AMANDA KAISER
Courtesy of DNRNEWS.com

So far the net profits have barely covered their net bank loss of 734.4 Million to + 800.2 Million. I hope the statements from this article made by Bertelli live up to expectations.
 
^just a financial thing...you are comparing apples to oranges here. In general, their operation is healthy as long as the profit covers interest payments. In other words, you should compare the interest payment with profit instead of comparing total debt amount with the profit.
Another indicator is financial leverage. In that case you should compare their debt amount to the sum of the equity+debt to figure out the leverage ratio. It's not a good thing to over leverage, i.e., borrowing too much debt. When the business wants to grow, the CEO will look at internal profit for money first, then debt, and to balance the capital resources, IPO will be used to raise cash as well. Prada is doing that right now to gain more financial resources and expand their business.
 

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