GOLDCORP

Goldcorp Inc.



Goldcorp Inc.

Introduction

Goldcorp is the fastest-growing, lowest-cost senior gold producer, with operations and development projects in politically stable jurisdictions throughout the Americas. Our strong project pipeline is positioned to drive long-term, sustainable growth.

Debt Management

years

Debt ratio

Total Debt to Equity

Equity Multiplier

(DFL)

2006

0.04

0.04

1.2

1.92

2007

0.05

0.05

1.5

1.32

2008

0.08

0.08

2.7

1.19

2009

0.06

0.07

2.5

2.1

2010

0.05

0.06

2.4

2.2

Capital Structure is a term used in finance to refer to how a company is structured and financed. Basically, it details the mixture of debt and equity used to finance the company. The equity is from investors and is preferred stock, common stock and retained earnings (cash) whilst the debt is bonds.

However, in contrast of the total ratio for debt to equity than balance sheet shows that there are liabilities less as compared to the equity. Thus, Goldcorp rely upon the liabilities that have been into the form of account payable and accrued liabilities, however, the income and mining tax payable both in the form of liabilities and current liabilities as well. There is no current debt as such in the year 2010, but there are future income and mining tax payable by the company. Similarly, current liability also involves these accounts that are identified as liability on the company. However, there are also current derivatives liabilities on the company. The greater proportion of the company which is financed by debt, the higher leveraged the company is. Goldcorp Company is financed with 94% equity and 6% debt, it has 15.6x leverage. Capital structure can also be measured by the debt-to-equity ratio. Usually, companies which are heavily financed by debt have more problems when there are issues in the money markets as they struggle to fund their assets.

Capital Structure can also refer to the way in which a takeover / acquisition offer is structured. Just like buying a house, an offer will be financed by cash, debt and issuing stock. The relative proportions used will determine the capital structure of the bid.

Liabilities are creditors' claims on the organizations assets. Liabilities are everything the organization owes to other entities. They are the debts of the organization. Often, organizations use the word payable to indicate a liability. For example, salaries payable, notes payable, accounts payable, and interest payable are all examples of liabilities. In addition, unearned or deferred revenue is reported as a liability. For example, if a museum collects a down payment in advance for a group tour, this amount is reported as a liability under the account unearned revenue until the tour is provided. Liabilities are reported on the statement of financial position in two categories: current and noncurrent.

Current liabilities: Current liabilities are expected to be paid in a year or less. Accounts payable, salaries payable, and interest payable are all examples of current liabilities. Current liabilities are often compared to the cash and receivables of the organization to determine if the organization will have sufficient funds available to pay upcoming debts.

Noncurrent, or long-term, liabilities: Noncurrent liabilities are due in more than a year. Mortgages payable and bonds payable are typical noncurrent liabilities. It is important to designate the debt that ...