Restructuring JAL You are helping ETIC decide on the plan of action for JAL. Your first task is to understand how and why JAL got into trouble. Then, you will need to advise ETIC on the two options explained in the case. Your memo is most eagerly awaited. 1. Propose and defend what you think might be an optimal capital structure for JAL (Again, using the checklist provided in the slides). 2. Calculate as many ratios for JAL as possible for the years 2005 through 2009. (e.g. gross margin, operating margin, EBITDA margin, net profit margin, current ratio, cash ratio, interest coverage ratio, cash coverage ratio, debt ratio, long-term debt ratio, debt-toequity ratio...) Comment on how these ratios evolved over time. Pay special attention to leverage ratios. Compare JAL to other airlines by using Exhibit 4. How did JAL end up in this situation? Was this bad luck, poor execution, or both? Describe the series of events that led JAL into financial distress. Describe the two options drawn out by ETIC for JAL. Why is liquidation not considered as an option by ETIC for JAL? What is the purpose of automatic stay? Debtor-in-possession financing? What are the main differences of bankruptcy procedures between the USA and Japan? What option would you recommend to ETIC? Why? .4393 porqgugn ED