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Word Count: 321
Analysis by a Long Term Creditor The interest a long term creditor is currently receiving is 56 A long term creditor could receive as much as 227 working somewhere else in the same industry So currently the industrial average is giving 171 more interest than workingat Cameco Corporation which is quite a big difference The risk involved in receiving your interest every year from Cameco Corporation is very high The number of times interest earned for Cameco Corporation in 1996 was 1468 times in 1997 it was earned 95 times a year and in 1998 it dropped down to 502 times earned a year Based on this trend in 1999 there could be another drop of interest earned a year However 502 times interest earned in one year is still a reasonable amount Therefore the risk with receiving interest in Cameco Corporation is not as high as it seems because earning interest 6 times a year is considered no risk The debt ratio in Cameco Corporation in 1996 was 267 in 1997 it was 255 and in 1998 it rose to 352 This means that 65 of Cameco Corporations assets is the equity ratio The 352 is below the benchmark of 65 and so the company can handle their and should be able to cover it because the equity ratio is 65 this provides Cameco Corporation with a margin of protection to the creditors against shrinkage of assets If Cameco Corporation goes bankrupt the creditors would take 352 from the equity ratio and Cameco would still have 65 of equity to cover the long term creditor so this person will get his money back Therefore If I were a long term creditor I would stay with Cameco Corporation This is because there is no risk involved in the interest earned at 502 times a year Even though the the rate of interest is 171 better at other companies
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