For the second straight day director of finance for the Barbados Light and Power company, Ricaido Jennings was crossed examined by both intervenors and members of the Fair Trading Commission, as the hearing for the utility company’s rate increase application went into its eighth day.
Jennings faced several questions related to its calculations surrounding the company’s required rate of returns. A number of questions revolved around the BL&P’s desired debt-to-equity ratio of 65-35.
Debt-to-equity (D/E) ratio is used to evaluate a company’s financial leverage and is calculated by dividing a company’s total liabilities by its shareholder equity. It is a measure of the degree to which a company is financing its operations with debt rather than its own resources. Jennings testified that in order to get to this ratio it was necessary to pay substantial dividends in some years. The post-lunch session of the hearing is currently ongoing at the Accra Beach Hotel. (CLM)