BHP Billiton Case

Based on the above income statement data (assume interest income is zero), the company's interest coverage ratio is

1. Liquidity ratios are a class of financial metrics that is used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts.

The appellant, Parkview Queensland Pty Ltd (“Parkview”), is a building contractor who commenced construction of a residential property development under a standard form building contract with Fortia funds Management Ltd (“Fortia”), the developer. Fortia financed the construction under a loan facility with the Bank of Western Australia Ltd (“BankWest”).

The solvency ratio is the ability for a company to repay debts shown in a percentage. The ratio shows if a business can meet goals of a long term loan by calculating the current and long term liabilities divided by net profit after taxes plus depreciation. In years one through four the

However, not every case is the same and certain cases can have sensitive information that may make an individual not want to cooperate. Also, training is expensive as well as the cameras. The revision in policy and the equipment are costly and time consuming. Also the rapid change in technology will put the unions in a dilemma as well as the policy because it will need constant revision to update changes in the policy.

In regards to current ratio we can see that CVS improved from 2009 to 2010, but in 2011 it fell once again. The higher the current ratio the more favorable it reflects on the company; in 2010 for every dollar of current liabilities the company had $1.60 of current assets to pay back its short term liabilities. Current cash debt coverage ratio demonstrates a better understanding of the company’s average day standing. Liquidity improved for CVS from 2009 to 2011.

This condition always preferred by creditor in order to lend money. The lower the ratio, the higher the cushion against the creditors' losses in event of liquidation. And the creditor would have willing to lend more money to a company which has low debt ratio than the high one.

Debt Service Coverage Ratio (“DSCR”) for the review period was 1.3x, somewhat below the SFS EF AM forecast of 1.5x, reflecting lower than expected net operating cash flows, largely due to lower energy output.

Solvency ratios is used to measure the ability for a business to meet its long term debts. The formula for Solvency ratio = (After Tax Net Profit + Depreciation) / Total liabilities. This formula calculates whether a business cash flow is sufficient enough to meet its short and long term liabilities.

From the time of its inception, Edward Jones has been focused about the customer segments, the markets and the products segments it wants to operate in. This focus has allowed Edward Jones to concentrate efforts and resources towards these segments and maximize the penetration within and profitability from this segment. The key factors that have helped build this strategy and the resulting success of Edward Jones are:

9. Debt service coverage = (Net Income + Interest + Depreciation) in Statement of Operations/ Interest + Principal Payments ($10 million assumed for this assignment)

Liquidity ratios measure the short term ability of a company to pay its obligations and meet their needs for maintaining cash. According to Cagle, Campbell & Jones (2013), “A good assessment of a company’s liquidity is important because a decline in liquidity leads to a greater risk of bankruptcy” (p. 44). Creditors, investors and analysts alike are all interested in a company’s liquidity. After computing liquidity

This report analyses the financial performance of BHP Billiton, a diversified natural resources group, for a potential investor. It uses the financial ratios to analyse the company’s profitability, liquidity, efficiency and investment potential.

The coverage ratios use cash flow from operations in most cases. Coverage ratios are important to long term investors and creditors because of the nature of the ratios that show the availability of cash to pay for items that include long term debts and dividends as well calculating percentages of cash flow from operations to shareholders equity, and average number of common shares outstanding (Ibarra, 2009). In addition, it has been determined that the cash flow to total debt (a coverage ratio) can be used as one of the best indicators of financial distress (Jooste, 2007). In all coverage ratios, a high ratio and increasing trends is the best case scenario.

Debt ratio helps in comparing total assets and total liabilities. If you have more liabilities it means you have lesser equity and therefore an increased leverage position.