Calculate the ratio using the financial statements on the company PDF and then find the rating from the Excel spreadsheet for each ratio answer. Show your work.

1. FFO/Debt (I will be nice to you. For this company, FFO would be the Net Income + all the other items on the Statement of cash flows from the top down to Deferred income tax expense. From the Statement of Cash Flows FFO = 3711 + 1690 + 63 + 60 + 445 = $5969) You also need debt. Debt here should be debt + any current portion of debt.

2. Debt/EBITDA (EBITDA = Net Profit + Interest +Taxes + Deprec & Amort)

3. EBITDA/Interest

4. Debt/Total Capital (Remember total capital is debt + equity)

5. What is the overall rating based on the 4 financial ratios?

2. From the company report, give the company an Industry Score. Explain why you chose that rating.

3. From the company report, give the company a Competitive Position Score. Explain why you chose that rating.

4. From the company report, give the company a Liquidity Analysis Score. Explain why you chose that rating.

5. What is your final rating for the company?

Ratio Analysis Point Value 1 2 Rating 3 AAA 4 AA 1 2 Industry Score Very Strong +2 Strong +1 Neutralo Weak -1 Very Weak -2 Competitive Position Strong +1 Neutral 0 Weak -1 Very Weak -2 Final Rating AA Liquidity Analysis Strong +1 Neutral 0 Less than Adequate -1 Vulnerable -2 5 3 A A BBB 6 4 BBB PD RR 0.000% N/A 0.025% 50.0% 0.100% 45.0% 0.250% 40.0% 1.000% 35.0% 5.000% 25.0% 30.000% 15.0% 36.000% 5.0% 95.000% 0.0% 7 BB 5 BB 8 6 B B 9 7 10 CC CC 11 C 12 13 1 1 1 1 2 2 Debt / EBITDA 1 or lower 1.1 to 2 2.1 to 3 3.1 to 4 14 15 16 17 18 2 EBITDA/ Interest 15x or higher 10x to 14.9x 6.5x to 9.9x 3.5x to 6.4x 2 3 3 FFO/ Debt 61% + 51% -60% 41% - 50% 31% -40% 21% -30% 11% - 20% 10% and lower 3 3 Debt / Capital 15%to 24% 25% to 34% 35% to 44% 45% to 54% 55% to 64% 65% to 74% 75% or higher 4 4 4 4 5 5 2x to 3.5x 5 5 6 4.1 to 5 5.1 to 6 6.1 to 7 6 6 19 20 6 O to 1.9x Negative 7 7 7 7 FFO Debt EBITDA 21 22 23 24 25 26 27 28 29 30 31 Interest Equity FFO/ Debt Debt / EBITDA EBITDA/ Interest Debt / Capital 22 Ratio Analysis Point Value 1 2 Rating 3 AAA 4 AA 1 2 Industry Score Very Strong +2 Strong +1 Neutralo Weak -1 Very Weak -2 Competitive Position Strong +1 Neutral 0 Weak -1 Very Weak -2 Final Rating AA Liquidity Analysis Strong +1 Neutral 0 Less than Adequate -1 Vulnerable -2 5 3 A A BBB 6 4 BBB PD RR 0.000% N/A 0.025% 50.0% 0.100% 45.0% 0.250% 40.0% 1.000% 35.0% 5.000% 25.0% 30.000% 15.0% 36.000% 5.0% 95.000% 0.0% 7 BB 5 BB 8 6 B B 9 7 10 CC CC 11 C 12 13 1 1 1 1 2 2 Debt / EBITDA 1 or lower 1.1 to 2 2.1 to 3 3.1 to 4 14 15 16 17 18 2 EBITDA/ Interest 15x or higher 10x to 14.9x 6.5x to 9.9x 3.5x to 6.4x 2 3 3 FFO/ Debt 61% + 51% -60% 41% - 50% 31% -40% 21% -30% 11% - 20% 10% and lower 3 3 Debt / Capital 15%to 24% 25% to 34% 35% to 44% 45% to 54% 55% to 64% 65% to 74% 75% or higher 4 4 4 4 5 5 2x to 3.5x 5 5 6 4.1 to 5 5.1 to 6 6.1 to 7 6 6 19 20 6 O to 1.9x Negative 7 7 7 7 FFO Debt EBITDA 21 22 23 24 25 26 27 28 29 30 31 Interest Equity FFO/ Debt Debt / EBITDA EBITDA/ Interest Debt / Capital 22