ROCKY MOUNTAIN HELICOPTERS, INC. I

As of early-1994, the senior management at Rocky Mountain Helicopters, Inc. was required to address serious problems stemming from the company's dismal financial performance in 1993. Decisions made in this context were to be based in large part on to outcome of the application of a financial model to the company's financial position and performance. This current research includes the development of a financial model for the company as of early-1994, and recommendations for actions to be initiated by the company's senior management.

The financial model for Rocky Mountain Helicopters for the 1994 operating year is developed within the contexts of income statement equations, flow of funds equations, and balance sheet equations. The finance model for the 1994 operating year is presented in the table which may be found on pages 5 and 6.

No capital generation activities was included in the financial model. Capital generation was not included to permit a better representation of the capital needs of the company. Because of increased depreciation in 1994 (projected) as opposed to 1993 (actual), the net flow of funds statement indicates a positive balance of $4 million. This positive balance, however, is misleading because the financial model did not provide for any repayment of the debt and lease obligations that entered default in 1993. Provisions for repayment o

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Approximate Word count = 1090
Approximate Pages = 4 (250 words per page)