Legal and Ethical Actions of NovaGold Resources Inc - Term Paper Example

Download file to see previous pages Similar class action lawsuits were also filed in the Supreme Court of British Columbia and in the Ontario Superior Court of justice in Canada. The $28.0 million settlement was covered by insurance companies and the company did not have to payout from own resources under the terms and conditions. (Marketwire 2011) NovaGold commenced environmental studies in 1996, which consisted of Meteorology, wetlands delineation related to mineral resource estimates, aquatic studies in the main drainages, water quality studies, and some waste rock characterization. This was further expanded to terrestrial wildlife and avian surveys, detailed aquatic studies, ambient air monitoring and cultural site surveys. NovaGold is equipped fully to overcome any challenges, even though it may require more time and with the progress of work, it will start showing in the share price. NovaGold clearly understands its community responsibilities and following all environmental norms would work to get all necessary permits to make the project most successful and only one of its kind in the world. (Safehaven 2010) Stocks of NovaGold are traded on NASDAQ, AMEX, and New York Stock Exchange. Revenue and Income From the latest results available for the year ended Nov 30, 2010, of NovaGold Resources Inc., it is seen that revenue has fallen to C$0.6M. Surprisingly, cost of goods sold has not gone down proportionately and it has remained at C$46.3M. Losses have gone up to the tune of C$-203.5M. (NovaGold Financials 2010) Basic Financial Ratios & Industrial Comparison Return on Assets: Net Income/ Total Assets stands negative at -5.17%, on industrial comparison it stands as the 60-80th percentile. A. Return on Capital: Given as after-tax operating income by the book value of invested capital and that comes to -5.55%, on industrial comparison it stands as the 60-80th percentile. B. Return on Equity: Net Income/Shareholder's Equity stands at -34.48%, on industrial comparison it stands as the 40-60th percentile. Credit Ratios: A. Current Ratio: given by Current Assets/Current Liabilities stands at 5.3 times; on the industrial comparison, it stands as the 60-80th percentile. B. Quick Ratio: given as Current Assets-Inventory/Current Liabilities stands at 5.1 times; on the industrial comparison, it stands as the 60-80th percentile. Margin Ratios: A. Gross Margin: given as Revenue-Cost of goods sold/Revenue that stands at -7631.22%, on industrial comparison it stands as the 0-20th percentile. B. EBITDA Margin: -9295.16%, on industrial comparison it stands as the 0-20th percentile. Debt-Equity Ratio: Total Debt/ Total Equity stands at 20.5, on industrial comparison it stands as the 60-80th percentile. Total Liabilities/Total Assets: 23.8, on industrial comparison it stands as the 60-80th percentile. (NovaGold Resources) Sales Forecast: NovaGold is a company doing exploration activities in the field of precious metals and necessary development of mineral properties in Alaska, Canada, British Columbia and the United States. The Company spearheads its operations through wholly owned subsidiaries, partnerships, and joint ventures. ...Download file to see next pagesRead More