Research and Market Entry Report for Austria Krystian Raymond
Financial Information and Analysis
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- 02/28/2010 02/28/2011 02/28/2012
- Statement Date Actual Actual
- CAD Thousands Historical Company Projections
- Free Cash Flow 51,700 120,825
- Free Cash After Dividends Debt Repayment 75,577 17,149
Financial Information and Analysis
RONA shows a good propensity to pay its debt as seen through the total debt / EBITDA ratio. The ratio shows the amount of years necessary to pay back all debt given constant debt and earnings figures. The ratio shows RONA’s above-average ability to pay down its debt. The debt/equity ratio analyzes the organization’s leverage and the amount of growth derived from debt. RONA’s ratio is high, indicating a reliance on debt to create growth; however a high debt/equity is not unheard of within the industry. RONA has a relatively high debt/TNW ratio, signifying its use of debt in relation to physical assets. The high ratio is less concerning given the established reputation of RONA and the amount of fixed assets and inventory that it holds in conducting its day-today operations. The EBITDA / Interest Expense ratio is used to determine the durability of a company by analyzing its ability to pay interest. The high ratio shows that RONA was able to pay its interest 16 times over in 2012, exhibiting the company’s strong propensity to pay its debts.
RONA’s cash flow from operations (CFO) has remained strong and is forecasted to maintain its stability over the medium-term. Strong CFO shows RONA’s ability to create consistent positive income from its retail operations. RONA’s free cash flow (FCF) is expected to bounce back considerably after the company’s downturn in 2011, allowing RONA to pursue the European investment opportunity in a manner that is healthy for the company. Historically, RONA has had high FCF, exhibiting its ability to generate positive cash flows. The company had a new debt issuance in 2013 but this has not created significant negative effects for the company. RONA had a current ratio of 2.42 in 2012 and has remained relatively stable historically. This reflects RONA’s solid ability to pay off short-term liabilities with its short-term assets like cash, receivables or inventory. RONA’s current ratio exhibits good liquidity for the company. RONA’s quick ratio was 0.78 in 2011, which is in line with industry standards. Due to the high inventory necessary for operations, the quick ratios within the home improvement industry are usually substantially lower than the current ratios. The ratios show that RONA is a healthy organization able to operate in an effective way. Directory: 2013 2013 -> Annual InStructional unit plan 2013 -> The Ministry of Education and Science of Ukraine 2013 -> #1 a lifesafer of virginia inc 2013 -> Name(s): your name here team or Group #(if applicable): Professor’s name 2013 -> Alcott Local School Council (lcs) Meeting Minutes 2013 -> Table Of Contents introduction 2 2013 -> Supplemental demographic information 2013 -> 【Education&Working Experience】 Download 3.19 Mb. Share with your friends:
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