BMO Capital Trust The company which I chose is BMO Capital Trust. The BMO Capital is a member of the BMO Financial Group. The trust is a close-ended trust established under the law of the province of Ontario. The company is a subsidiary of Bank of Montreal. The BMO Trust Capital was incorporated in 2000. The company’s headquarters is based in Toronto, ON. The BMO Financial Group is one of the leading financial services provider in Canada. It has total assets worth US$513 billion and above 45,000 employees as of October 31, 2016. The trust issues and sell basically two types of securities to all of its investors, a series of transferable trust units called “Trust Capital Securities” or also known as “BMO BOaTS”, and “Special Trust Securities”. …show more content…
The main purpose of the Trust Capital Securities is to provide the Bank of Montreal with a cost effective means of raising capital for Canadian bank regulatory purposes. The Bank of Montreal performs as an administrative agent in the BMO Capital Trust. The Bank issued an initial public offering of $450,000,000 of trust subordinated notes all over Canada on December 18, 2008 and may also issue further series of trust …show more content…
BMO Capital Market. I would analyse the financial position of the company from investors’ point of view to make important decisions. (BMO Financial Group, 2016) (BMO Capital Markets, 2016) (Bloomberg, 2016) (Ontario Securities Commission , 2016) Analysing the company for Investor’s position: Ratio Analysis is very important tool for analysing the financial position of the company. The ratios which I would use to analyse the company as an investor are as follows: 1. Current ratio: The Current ratio helps us to understand the ability of the company to pay its short- term liabilities against its short- term assets. If the current ratio is high then it means company can pay its debts easily and is in a good position to overcome any hurdles during the market fluctuation and vice-versa. The current ratio is calculated as follows: Current ratio = __Current Asset___ Current Liabilities 2. Debt to equity ratio: The debt to equity ratio helps an investor to identify proportion of the company financing that comes from shareholders equity (Investors) and the amount that has been borrowed (i.e. debt). The lower the debt to equity ratio means more financially strong business and higher the debt to equity ratio means higher risk for
Net working capital represents organization’s operating liquidity. In order to compute the net working capital, total current assets are divided from total current liabilities. When there is sufficient excess of current assets over current liabilities, an organization might be considered sufficiently liquid. Another ratio that helps in assessing the operating liquidity of as company is a current ratio. The ratio is calculated by dividing the total current assets over total current liabilities. When the current ratio is high, the organization has enough of current assets to pay for the liabilities. Yet, another mean of calculating the organization’s debt-paying ability is the debt ratio. To calculate the ratio, total liabilities are divided by total assets. The computation gives information on what proportion of organization’s assets is financed by a debt, and what is the entity’s ability to pay for current and long term liabilities. Lower debt ratio is better, because the low liabilities require low debt payments. To be able to lend money, an organization’s current ratio has to fall above a certain level, also the debt ratio cannot rise above a certain threshold. Otherwise, the entity will not be able to lend money or will have to pay high penalties. The following steps can be undertaken by a company to keep the debt ratio within normal
The tax-exempt status creates a high level of demand particularly from investors who seek tax exempt cash flow as a source of annual income and revenue. The buyers of TOBs are for the most part money market mutual funds. Money market mutual funds are guided by certain regulations as to what type of bonds they can have in their portfolio. Specifically, the underlying municipal bonds must be rated at least AA-. The maximum maturity of the municipal bonds is thirteen months and the average weighted maturity of a money market fund’s tax exempt bond portfolio must be no longer than 50 days. This compares to typical maturities of municipal bonds of five to fifteen years. The money fund maturity guidelines combined with a strong demand for tax exempt instruments creates a very active and deep market for these synthetically created short-term tax-exempt securities. The approximate size of the TOB market is $70Bn.
In 1986, Mortgage-Backed Securities(MBSs) was introduced. About this, Esty, Tufano and Headley (1998) described that “Banc One replaced many of its municipal investments with MBSs, which were fixed-income investments whose payment stream was backed by pools of mortgage loans and which were
Macquarie Bank (now Macquarie Group) has risen from a small, Australian subsidiary of a UK investment bank to become one of the world’s most prominent banks. It is particularly prominent in the field of infrastructure where an innovative, specialist approach to investing and structuring has given it a platform to grow assets and revenues and secure early market share in an infrastructure privatisation renaissance.
far behind and seems like a firm with economic success and great debt management, but with the money in my pocket I would use it on McDonalds.
Current and Long Term liabilities are pressuring company's ratios. Once the expansion completed and the debt shifted from current to long term, ratios will look in the favor of the company.
Security, in business economics, written evidence of ownership conferring the right to receive property not currently in possession of the holder. The most common types of securities are stocks and bonds, of which there are many particular kinds designed to meet specialized needs. This article deals mainly with the buying and selling of securities issued by private corporations. (The securities issued by governments are discussed in the article government economic policy.)
Scotia Capital is the group’s wholesale banking arm, which offers tailored financial products and services to corporate, government and institutional clients in many of the countries it has a physical presence. Some of the services offered by Scotia Capital globally are corporate lending, equity and debt underwriting, mergers & acquisitions advisory services, as well as capital markets products and services, such as fixed income; derivatives; prime brokerage;
This is a system where the money of multiple investors is grouped together and invested into the ASX by a proffessional investment
The increasing trend in the quick ratio from 4.7 to 7.7 during 2013 – 2014 shows that its quick assets are more as compared to its current liabilities. This shows that the firm is easily paying off its current liabilities. Similarly, the increasing trend in the current ratio reflects that the firm is easily paying off its current debts by using profits generated from its current operations. Likewise, the increasing trend in the asset turnover ratio means that the firm is using its assets productively.
It is a leverage ratio, which indicates a relationship between the debt and equity. The ratio indicates the total liabilities of the firm and the total shareholders’ equity both the figures are present in the company’s balance sheet.
Ratio analysis is an important and age-old technique of financial analysis. The following are some of the advantages of ratio analysis:
Beneficiaries may be individuals or entities. (Rana, B., 2007) The main purpose of trusts is to ensure that the beneficiaries receive some kind of benefit without actually owning the assets themeselves. The trust document, also called a declaration of trust or a trust instrument, is a legal document that establishes a trust. It consists of the name of the grantor, the trustee and the beneficiary, it should also list the date of its establishment.
This section will discuss ratio analysis for the following ratios: current ratio, quick (acid-test) ratio, average collection period, debt to assets ratio, debt to equity ratio, interest coverage ratio, net profit margin, and price to earnings ratio. Depending on the end user which ratio carries more importance, however, all must be familiar with ratio analysis. Details on each company's performance for each of these areas can be found in the attached ratio analysis worksheet.
I have leant that ratio analysis offers better insight of a company’s financial position on the short-term and long-term basis. However, I would recommend that investor advice should be based on ratio analysis that considers ratios from several years. This will ensure that the investor is making an informed decision based on the company’s financial ratio performance trend.