Case Study Of BMO Capital Trust

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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

In this essay, the author

  • Explains that ratio analysis is an important tool for analysing the financial position of a company.
  • Explains that the current ratio helps companies understand their ability to pay their short-term liabilities against their assets. if it is high, it means company can pay its debts easily and is in good position to overcome market fluctuations.
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