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Developing Your Equity Redemption Budget

Developing Your Equity Redemption Budget. Leon Stejskal The Triangle Companies Advanced OCCD March 30, 2005. Debt/Equity Mix Questions:. Does co-op have the ability to repay the debt incurred? Does co-op have adequate financial flexibility?

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Developing Your Equity Redemption Budget

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  1. Developing Your Equity Redemption Budget Leon Stejskal The Triangle Companies Advanced OCCD March 30, 2005

  2. Debt/Equity MixQuestions: • Does co-op have the ability to repay the debt incurred? • Does co-op have adequate financial flexibility? • Does the rate of return on additional assets justify additional debt? • Are management and board comfortable with the debt/equity level?

  3. Equity Management Process 1. Determine equity redemption program a. Age of patron b. Revolving fund c. Pool d. Combination • Determine equity redemption budget a. Wish list b. What can we afford

  4. Developing An Equity Redemption Budget • Considerations: Fixed Assets needed in the next 5 years Goals for Stock retirement plan • Establish priority to be used to develop budget: Working Capital Debt to Equity Members Equity

  5. Local Profits Needed

  6. Anytown CoopBalance SheetJanuary 1, XXXX

  7. Year End Results

  8. Anytown CoopBalance SheetDecember 31, XXXX

  9. Redemption Budget Calculation Worksheet

  10. Balance Sheet – December 31, XXXX

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