Credit Rating & Debt Policy
Credit Rating & Debt Policy
Credit Rating & Debt Policy
Debt Policy
DR - 6
Qualitative
• Industry Dynamics
• Company Profile
• Brand Equity
Discussion
• Business Risk
• Litigation and Legislative Risks Outline
Quantitative
• Profitability Ratio Analysis
• Capitalization Ratio Analysis
• Coverage Ratio Analysis
Forbes: Most profitable company
(1997)
Past
Performance
5 year return on capital: 92.1%
Net Sales
$1,600.00
$1,400.00
$1,200.00
$1,000.00
$800.00
$600.00
$400.00
$200.00
$0.00
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Past Performance
Sales Growth Gross Profit Margin
20.00%
82.00%
18.00%
80.00%
16.00%
14.00% 78.00%
12.00% 76.00%
10.00% 74.00%
8.00%
72.00%
6.00%
70.00%
4.00%
2.00% 68.00%
0.00% 66.00%
1986 1988 1990 1992 1994 1996 1998 2000 1986 1988 1990 1992 1994 1996 1998 2000
03
UST - % Market Share
88.00%
86.00%
84.00%
82.00%
80.00%
78.00%
76.00%
74.00%
72.00%
1991 1992 1993 1994 1995 1996 1997 1998
Competitors - % Market Share
14.00%
12.00%
10.00%
8.00%
Conwood
Swedish Match
6.00% Swisher
Other Manufacturers
4.00%
2.00%
0.00%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Industry Analysis
• Smokeless Tobacco Market of $2 Billion
• Target Market
• Consumer Perception
Business Risk
• Litigation Risks
• Promotional Restriction
• Individual’s Perception
• Anti-Trust Laws
Competitor Analysis
• Late Entry into Value Market
• Product Diversification
• Steady Returns
Financial Ratios
Profitability Ratios
• Return on Assets
• Return on Equity
Financial Ratios
Profitability Ratios
Financial Ratios
Profitability Ratios
Financial Ratios
Profitability Ratios
Financial Preparation for Millennials | EWCG 04
Financial Ratios
Capitalization Ratios
• Debt/Capitalization Ratio
Financial Preparation for Millennials | EWCG
Financial Ratios
Coverage Ratios
Rating Criteria
Adverse Effects due to:
• Litigation Risk
• Business Risk
Recommendations
Rating: AA-
capital.