2.1 Matters relevant to understanding WorleyParsons' financial position

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Our financial capacity remains strong given our cash, gearing and debt positions.

 
FY2015
$'M
FY2014
$'M
Comments
Movement

1. Operating cash flow

251.3

550.1

Our operating cash flow comprises the payments we receive from our customers less the amount we pay our suppliers plus related interest and tax paid. In our financial statements, operating cash flow is called net cash inflow from operating activities.

Our operating cash flow for FY2015 represents a high cash conversion rate of 127% of underlying NPAT.

2. Gearing ratio

28.0%

18.7%

Our gearing ratio is our net debt divided by the sum of our net debt and our total equity, at the end of the financial year. Refer to Note 12 to the Financial Statements for the calculation of gearing ratio.

Our gearing ratio increased by 9 percentage points in FY2015 when compared to FY2014, due to the impact of the impairment charge on equity, foreign exchange impacts and the additional funding required for acquisitions and working capital requirements.

This ratio is at the middle of our gearing target of 25% to 35%.

3. Debt facility utilization

59%

50%

Our debt facility utilization is the percentage of our debt facilities that we were using at the end of the financial year.

Our debt facility utilization increased by 9 percentage points in FY2015 when compared to FY2014, due to additional funding requirements for acquisitions and working capital.

4. Loan and overdraft facilities

2,087

1,783

Our loan and overdraft facilities are the amount of our debt facilities at the end of the financial year.

The amount of our loan and overdraft facilities increased during FY2015, due to foreign exchange impacts.