Ability to Pay Analysis

Ability to Pay Analysis and Miller Kaplan

For various reasons, a company may request financial concessions from a labor organization. In these situations, Miller Kaplan can analyze the company‘s records to determine the company’s ability to meet the financial requirements of the collective bargaining agreement. Miller Kaplan professionals analyze the company’s financial statements income tax returns, profitability ratios and other financial and non-financial records to obtain an understanding of the employer company’s financial position. The results of the profitability ratio analysis and the ability to pay analysis are discussed with the labor organizations representative and a determination is made as to whether the company requires financial concessions to continue its operations.

Profitability Ratios

Profitability ratios are an integral part of financial statement analysis and quantify many aspects of business. These ratios allow for comparisons between companies, between industries, between different time periods for one company a between a single company and its industry average. For profitability ratios to have meaning they need to be benchmarked against something else such as past performance or another company.

If you would like to obtain additional information about an ability to pay analysis or a profitability ratios analysis, please contact us online or by phone at (818) 769-2010.