CANADIAN NATURAL RESOURCES

Canadian Natural Resources LTD



Canadian Natural Resources LTD

Company Introduction

Canadian Natural Resources (CNR) is a Canada-based independent energy company engaged in the acquisition, exploration, development, production, marketing, and sale of crude oil, natural gas liquids (NGLs), natural gas, and bitumen. The company's principal operating regions are North America, North Sea, and Offshore West Africa. Canadian Natural Resources (CNR) is an independent crude oil and natural gas exploration and development company. It has operations in North America, the North Sea, and offshore West Africa. CNR is headquartered in Alberta, Canada and employs about 4,700 people (CNR, 2011).

Part A.

1.

Debt Management

2010

2009

2008

2007

2006

Debt Ratio

0.36

0.47

0.51

0.64

0.73

Total Debt to Equity

0.41

0.5

0.71

0.82

1.03

Financial Leverage

2.03

2.11

2.32

2.71

3.1

From knowing to what extent the various funding sources to help finance various assets, it is also necessary to know how they are structured the financing sources of the company. That is, how they relate to each other borrowed funds, permanent resources and equity of it. The Debt Ratio measures the intensity of all the debt of the company in relation to its funds, measures the percentage of total funds provided by creditors (Brigham, 2010).

The debt ratio compares debt (short, medium and long term) to total assets held by the company. This ratio should be as small as possible to say that the company has little debt. Debt levels above 80% means that the company is already heavily in debt and therefore dependent. A debt ratio of 30% is excellent. A ratio of 30-36% is good. A ratio greater than 40% would make it difficult to approve loan and pay it back. Different credit rating, which is the portrait of your credit history, debt ratio takes into account your current income. Canadian Natural Resource's total debt ratio is 36%, which means it is good and under controllable condition. However, the company should maintain and decrease it in future to avoid financial risks.

Debt to equity ratio is the ratio of total debt for short-term and long-term liabilities to equity. Increasing debt to equity ratio more than 1:1 is considered as risky. It is simply calculated by dividing the total debt of the company between capitals. The debt to equity ratio varies with the nature of business and the volatility of cash flows. Current liabilities should not be less than 1.25 times equity; otherwise the creditors have much to say about how to conduct its business operations. Some analysts believe the current liabilities to stockholders' equity should be no more than 80% and long-term debt should not exceed more than 50% equity. The higher the ratio, the higher the company is in debt. The leader must play accurately between the amount of its debt and its capital s to avoid being too dependent on shareholder s or too dependent on bank s. A company deeply in debt may not be unprofitable.

Canadian Natural Resources debt to equity ratio is also in very good position and the total debt is 0.41 times the total equity. Which means company can easily pay off its ...