This 9 page paper considers the company of Avis Europe. Written in report style the paper considers the gearing of the company, the calculation of WACC and the ways in which the company may seek to raise capital. The bibliography cites 5 sources.
Name of Research Paper File: TS14_TEavis01.rtf
Unformatted Sample Text from the Research Paper:
pages as well as the annual reports. However, when using this information we need to remember we are looking at historical information, and as such the information is out of
date before it is used. The situation in any fincial analysis is a snap shot of the company at one point in time, and as such is subject to change.
If we consider the company of Avis Europe we can look at the issues such as gearing capital structure and the impact that a project that reduces profits may have
on the overall position of the company and what it may mean to the company or to an investor. In this report we will consider these issues in turn. The
annual report used in the 2000 annual report, with any more up to date figures that are available on or off line. 2. Gearing. The first aspect we may consider
is what is known as the gearing. This is the amount that the company has borrowed by comparison to the amount of assets that are owned by the company. There
are several gearing ratios that can be used here, we will consider the three most popular gearing ratios 2.1 Gearing ratio This calculation
is undertaken by looking at the long term liabilities, this is down by taking the total liabilities and deducting the current liabilities. This will then be divided by the capital
employed in a company. However, we have a problem in the way this is calculated, as there is no legal definition of what is meant by capital employed. In some
definitions this will be the shareholders equity, including reserves, plus the long term debt. In other definition it is the is the capital assets plus the net current assets