Future Cash Needs and Business One of the critical functions perfor

One of the critical functions performed within a company is determining the need for future cash and possible sources of those needs. Such a projection requires that the company have a thorough understanding of its operations and its market prospects, as well as a clear understanding of its current financial position. Potential investors and others (including creditors and current shareholders) also have an interest in how the company is doing and where its future funds are coming from. For companies that are going through extreme growth, it is possible to grow faster than the financial structure can expand. For this reason, understanding the financial position of the company is critical to its long-term success. This research considers one multinational company, Bombardier, and its financial situation through the use of financial and ratio analysis.

Bombardier is a Canadian-based company with operations throughout the world. The current company came into existence through the merger of Bombardier Limited and MLW-Worthington Limited in 1976. Bombardier Limited manufactured snow tractors and snowmobiles, while MLW-Worthington manufactured locomotives. The company, renamed Bombardier, Incorporated in 1978, issued its initial public offering on Canadian stock exchanges in 1981, and has continued to grow through acquisitions, including the acquisition of Learjet in 1990. The United States and Mexico accounted for 47 percent of the company's sal

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A/R 358.4 449 667 -20% -33% Inventory 3455.2 2595 1914 33% 36% Other Current Assets 1811.4 1456 1121 24% 30% Current Assets 6521 5037 4128 29% 22% PPE (gross) 1200 1142 932 5% 23% PPE (net) 1200 1142 932 5% 23% Other 230 214 402 7% -47% Total Assets 7950 6393 5462 24% 17% A/P 2124.6 1875 1509 13% 24% Current Portion LT Debt 1402.4 841 764 67% 10% Other Current 591.4 345 196 72% 76% Income Taxes Payable 65.9 51 20 28% 162% Current Liabilities 4184 3112 2489 34% 25% LT Debt 1355 1283 1043 6% 23% Other Liabilities 199 179 165 11% 9% Total Liabilities 5738 4574 3696 25% 24% Equity 2213 1819 1765 22% 3% Total Debt & Equity 7950 6393 5462 24% 17% The company's overall performance during this period has been impressive, with annual gains well in the double digits for 1995 to 1996 and 1996 to 1997. The company's liabilities increased at approximately the same rate over the two years, bu

Category: Business - F