General Overview of United Utilities Group Plc Term Paper

ecumenic Overview of get together Utilities Group Plc - Term Paper ExampleBy doing this, the ac political party helps in the smooth extend of about 7 million people as well as 200,000 businesses in the North wolfram and it does this by the provision of fresh and clean water on a daily basis. The company similarly takes away and treats the North West waste water which then helps in keeping the beaches and rivers quite clean. The company plans to finance its operations using debt securities instead of conventional bonds. This plan matches the market trends as the market, or the field across the globe has been opting for the issuance of conventional debts due to the low interest rates attracted by bonds. Bonds normally pay a fixed income and the issuance of bonds in the utilities sphere of influence in the United Kingdom further account for half of the total funds raised in the equity capital markets. Firms in this sector just like the United Utilities Group Plc are opting for the issuance of debt securities even though it has high risks of with child(p) the market viability. Data also showed that only 8.7% of the funds raised were through equity capital markets date the remaining portion being raised through the use of debt securities. ... b. General Overview of the issued debt Debt security is an instrument which bottom of the inning be sold or bought between two different parties and include corporate bonds, collateralized securities, preferred blood line and zero-coupon securities (Fabozzi et.al 2003). The interest rate on a debt security is usually determined by the borrowers repayment ability. Debts securities are quite safer than equity securities as the principal amount is usually returned to the lender upon the maturity of the security. This is what United Utilities Group Plc plans to use as it mode of raising finance. 2. Evaluation using the Annual Financial Reports and accounts a. The gravel of the company to issue debt securities The annu al profits for the company have decreased from ?909.20 million in prove 2008 to ? 316.5 million in March 2012. Its EBITDA has been fluctuating over the period with an increase only being enter on March 2009 after which the company put down a continued decline. The company has also recorded a decrease in its Free Cash periods for the Firm (FCFF) from ? 562.7 million in 2011 to ?559.8 million in 2012. The company borrowed ?215 million during the 2012 financial year in order to offset the dividends of ?209 million. Free Cash Flow to Equity (FCFE) is low for the firm as the firms equity is higher than the free interchange flow. From the March 2012 annual statement, it is quite evident that the company has made maximum use of debt securities as it gain debt is quite higher than the one recorded during the previous year which then reflects the additional borrowing make by the company as a way of funding its capital investment programmes. The gearing ratios for the company are also quite