Fitch EMEA Aerospace and Defence Dashboards on Liquidity
The publications explore themes affecting issuer liquidity profiles for the sector in Europe:
- Liquidity is broadly robust across the sector and underpins the mostly strong investment grade ratings of issuers
- Intra-year working capital cash flows can be volatile and cash balances can be misleadingly high at year-end as a result
- Liquidity can also be boosted by advance payments, which for some lead contractors such as Airbus, constitute a very large part of net working capital
- Where net working capital is negative, an analytical adjustment is necessary in order to calculate net leverage
- What to Watch: Intra-year working capital swings, large movements in advance payments, negative net working capital not covered by gross cash
- The rating impact of the above
A complete review of these topics including a review of the dashboards is available at www.fitchratings.com.
The EMEA Aerospace and Defence Dashboard is published bi-annually focusing on various sector themes.
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