ACCT3013 financial statement analysis

Exercise W10E1: Noble Group credit analysis

An important technique in credit analysis is to compare the cash available for debt service with the debt service requirement.

Cash available for debt service = Free cash flow ? Net dividends

Debt service requirement = Payments to existing debt holders regarding financial debt at the beginning of the period

Required [SHOW ALL WORKINGS]

1. Compare the actual cash available for debt service with the debt service requirement for the fiscal year 2015.
2. Compare the would-be cash available for debt service with the debt service requirement for the fiscal year 2015, if Noble?s new bank debt raised in 2015 were only 2/3 of its actual amount.

Note: Noble?s cash flow statement follows an unusual ?semi-direct? method, whereby the capital charges are listed directly.

ACCT3013 Financial Statement Analysis Workshop Credit analysis [For enquiries please contact zihang.peng@sydney.edu.au] Tutorial assignment Exercise W10E1: Noble Group credit analysis An important technique in credit analysis is to compare the cash available for debt service with the debt service requirement. Cash available for debt service = Free cash flow - Net dividends Debt service requirement = Payments to existing debt holders regarding financial debt at the beginning of the period Noble Group reported its statement of cash flows as follows: The details of \"NET CASH FLOWS FROM INVESTING ACTIVITIES\" and \"NET CASH FLOWS FROM FINANCING ACTIVITIES\" are provided in the notes and replicated here: In response to market concerns over its liquidity, Noble raised $9,461,966 new bank debt financing to boost its cash holding. Required [SHOW ALL WORKINGS] 1. Compare the actual cash available for debt service with the debt service requirement for the fiscal year 2015. 2. Compare the would-be cash available for debt service with the debt service requirement for the fiscal year 2015, if Noble's new bank debt raised in 2015 were only 2/3 of its actual amount. Note: Noble's cash flow statement follows an unusual \"semi-direct\" method, whereby the capital charges are listed directly