Purchase Of Inventory And Business Expansions Essay

881 Words4 Pages
Over the years, Vail Resort has needed to raise capital for the purchase of inventory and business expansions. Vail Resort issued bonds as one way to raise money for future purchases or investments. Bonds function like a loan between a corporation and the investor. In other words, a bond is an instrument of indebtedness of the bond issuer to the investors, meaning that bonds are a debt security (Vail Resorts, 2014). To fully understand Vail Resort debt, you need to look how much company debt Vail Resort has, along with the risk of debt. According to the report, Vail Resort Net Debt is defined as long-term debt plus long-term debt due within one year less cash (Vail Resorts, 2014).
As long as companies wisely use the money borrowed, business can dramatically increase revenue and pay off debts. Long-term debt as of July, 2014 consists of the following. Vail Resort has Industrial Development bonds consisting of (in thousands) $41,200 (Vail Resorts, 2014). Industrial Development bonds are a type of revenue bond organized by a local government, which were issued by Eagle County, Colorado (“Eagle County Bonds”) (Vail Resorts, 2014). These bonds are set to mature on August 1, 2019. The Eagle County Bonds are accruing an interest rate of 6.95% with the interest being payable semi-annually on February 1 and August 1 (Vail Resorts, 2014).
Other long-debt includes outstanding debt for four employee housing entities. They include, Breckenridge Terrace, Tarnes, BC Housing and

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