CAE Maturity Matching Maturity Matching Case Study

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The maturity matching practices at CAE are actually significantly out of balance, though this is not necessarily undesirable giving the current climate and the potential for volatility in CAE's primary industry of operation, namely military and quasi-military endeavors. The disparity between the average life of assets and the average life of liabilities held by the company s obviously in favor of assets, and to a large degree; this means that the company is much heavier on long-term assets than it is on long-term debts, which can suggest that it is not utilizing its assets to their full potential in order to maximize growth. The long-term assets held by the company could be used to fuel growth by borrowing against them or utilizing current cash flow more efficiently, in other words.

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An examination of the current assets and liabilities of the company over the past eight reported quarters, however, shows that the two stay in relatively close balance (though with assets always outstripping liabilities sometimes more considerably than others). This suggests that though short-term liabilities are being funded by long-term assets, the company is operating more efficiently than an examination of average lives itself seems to suggest.

There is still room for improvement at CAE, however. The company could potentially achieve faster growth by fully utilizing its long-term assets to secure long-term resources (i.e. liabilities) that fuel increased research and development. CAE is already an innovative leader, but increasing that innovation to the maximum extent possible would benefit the company......

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