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Essay / Research Paper Abstract
This 4 page paper examines the capital structure of the Australian based recycling company Sims Group Pty, looking at the pattern since 2000 and comparing the debt ratios to those of other global waste recycling companies and considers the impact of the observed level of debt. The bibliography cites 9 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TEsimscs.rtf
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Unformatted sample text from the term paper:
the underlying capital structure, considering how this is currently positions, the past patterns and compare this to other global recycling companies to gain a context to the position taken. The
capital structure is determined by the mix of capital form debt sources, also known as liabilities and the level of capital that is classified as equity, this is money that
effectively belongs to the shareholders. If we look at the 2003 accounts and use the accounts for the parent entity and we see the following pattern, looking at the
total debt and total equity to calculate the relative ratios Capital structure Total debt (a) Total equity (b) Total (a + b) Debt ratio Equity ratio 2003 165354
263679 429033 38.54% 61.46% 2002 158927 237170 396097 40.12% 59.88% 2001 159519 239177 398696 40.01% 59.99% 2000 143965 222117 366082 39.33% 60.67% There is a fairly consistent pattern here with
a higher level of equity than debt. This may be seen as giving the company a lower risk profile and also reflecting the recent movements. In this four year period
there is a slight increase and then a decrease in the debt. There has been a period of growth, and whilst there have been some acquisitions the concentration during the
middle period was on organic growth in the global arena. By the time we get to 2003 there is a rationalisation, not overall, but to ensure there is a maximisation
of resources and there are some operations that are not performing to the same high levers which are realised and as such we see the ability to decrease the debt
ratio despite the fact the debt level is increasing. This is due to the faster level of equity creation. If we look at this we can consider the debt
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