United Utilities

As long as the current ratio, which takes inventories into account, is higher than 1, they do not experience any problems repaying their short-term liabilities. However, the quick ratio is smaller than 1 and has marginally decreased in 2011. Due to this Next Plc might have problems paying off their short-term liabilities if sales decreases in the next years.

Creditors take the biggest risk when lending money due to the fact that they have all the skin in the game and are taking a calculated risk. The review of the three aforementioned financial statements seem to be the clearest way to come to a conclusion about whether or not a creditor should lend a company money.

Two-year decrease of liquidity measures including current ratio and quick ratio reveals the problems concerning company’s short-term solvency and liquidity. Butler Lumber Company’s current ratio decreased to 145.05% in 1990 from the level of 180.00% in 1988. The same decrease happened to quick ratio (decreased from 88.08% in 1988 to 66.92% in 1990). As the short-term lender, Northrop National Bank should have noticed that Butler Lumber Company’s ability to pay its bills over the short run without undue press needs to be carefully examined. The decrease of current ratio also implies the decreasing level of company’s net working capital, which is another sign of lower level of liquidity.

Creditors normally focus on the liquidity or solvency of the borrower in terms of current ratio and quick ratio, which indicate whether the company has enough working capital to cover the short-term debts. Myer will enter into a syndicated facility agreement to refinance the existing borrowings of the Myer Group. Besides, creditors are interested in the business risks the company might undertake, which indicate the possibility that the company might be unable to pay back the long-term liability in the future. From this point, the expectation on high return on investment and high profitability in the long run make the creditor’s interest aligned with shareholders’ value.

Increase in current liabilities Substantial increase in current liabilities weakened the company’s liquidity position. Its current liabilities were US$2,063.94 million at the end of FY2010, a 48.09% increase compared to the previous year. However, its current assets recorded a marginal increase of 25.07% - from US$1,770.02 million at the end of FY2009 to US$2,213.72 million at the end of FY2010. Following this, the company’s current ratio declined from 1.27 at the end of the FY2009 to 1.07 at the end of FY2010. A lower current ratio indicates that the company is in a weak financial position, and it may find it difficult to meet its day-to-day obligations.

Lawsons’ liquidity ratios may be alarming to the bank. The company’s ability to repay short-term debt has significantly deteriorated over their four year span to the point where the company is almost unable to operate. This is defiantly a fragment of the company that the bank will have to take a deeper analysis on.

Du Pont's financial policy had always been based on maximization of financial flexibility. Taking to consideration the riskiness of Du Pont's businesses, its competitive position and profitability had declined in the last 20 years. Moreover, the firm is still forced to seek external financing each year for the next five years (1983-1987) due to the continued high level of capital expenditures which are considered non-deferrable to redress the causes of poor performance. In view of the importance and magnitude of the projected financing needs, the firm is concerned about how the cost and availability of debt

The company lost money almost every year since its leveraged buyout by Coniston Partners in 1989. The income generated was not sufficient to service the interest expenses of the company which stood at $2.62B in 1996. From Exhibit 1, we can say that interest coverage ratio computed as EBIT / Interest Expense was 1.31 in 1989 and has been decreasing over years and currently stands at 0.59. This raises a question of how the company can meet its interest payments without raising cash or selling assets.

Midland’s projected capital spending in refining and marketing would remain stable, without substantial growth in 2007 and 2008. Petrochemical capital spending was expected to near future and new investments would be undertaken by joint ventures outside the United States. Equity interest with foreign partners generally hovered at 50% for Midland’s foreign partners. Mortensen measured performance or business in two ways: (1). Performance was measured against plan over 1-, 3- and 5- years. (2). Measured based on economic value added (EVA) in which the company defined debt-free cash flows as net operating

The airline industry is greatly influenced by the the travel and tourism trends across the globe. The World Travel and Tourism Board states that the the level of tourism is likely to grow even as the years progress. The growth in the level of tourism is expected to grow at a level of 4.5 per cent annually. This is expected to continue upto 2017. Thus the organization should fully prepare it self and take over the tourism market.

Diageo’s mixture of the short- and the long-term debt and the currencies can be a subject for concern: having 47% of the debt was raised via short-term commercial papers and thus exposing the company to the refinancing risk in case of the adverse changes in the interest rates. Currencies’ mixture of debt was also quite concerning: with the ca. 50% of operating profits

The company currently faces serious financial challenges. It was struggling with declining sales and increasing costs. Since 2004, revenues had fallen by more than 40% while costs especially for employees health insurance, maintenance, and utilities climbed. Credits and loans had been borrowed to

Utilizing the monthly forecast financial statement provided by Guna Fibres, Exhibit 1, it is necessary to create a statement of cash flows to begin to assess how the company’s capital is being managed through the working capital accounts of the firm. Exhibit 2 shows the breakdown of cash flows on a monthly basis based on the forecasted information provided by Guna Fibres. There are several important insights to point to instability within Guna Fibres. The first trend that is concerning is that according to Guna Fibres forecast, they will require a positive cash flow from financing activities through the month of June 2012 just maintain operations. Certainly, if this was to be presented to the bank there would be no chance that they would be willing to extend credit as Guna Fibres will not be able to zero out the debt balance in the coming months. Examination of Exhibit 3 shows the statement of cash flows for Guna Fibres for year ending in December 2012. Note the highlighted the cell that indicates the change in short term notes payable for the year in the amount of

The landscape of Hyderabad’s water utility today is characterized by inadequate water supply outpaced by growing demand, an unreliable network, inequitable water access for low-income households, and a tense political climate. If these issues are not urgently addressed in the private-sector participation (PSP) sought by the city, they will continue to plague Hyderabad into the future. After thorough analysis, we recommend the Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB) strive for an output-based concession that grants a private company flexibility to expand as desired, but also ties financial incentives to expansion and performance to ensure pro-poor coverage.

Consequently, the role of organisation as service provider helped tackle drinking water scarcity in the State, placating the impatient politicians. The scientific survey by organisation helped in greater success of DWs in terms of GW availability. However, it became imperative for organisations to modify their structure to suit the new roles, new attitudes and approaches in its functioning. GSDA, too, while performing the