Volvo 2012 Annual Report Download - page 112

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LIQUIDITY RISKS
Liquidity risk is defined as the risk that the Volvo Group would be unable
to finance or refinance its assets or fulfill its payment obligations.
POLICY
The Volvo Group assures itself of sound financial preparedness by always
keeping a certain percentage of its sales in liquid assets. A balance
between short and long-term borrowing, as well as borrowing prepared-
ness in the form of overdraft facilities, are intended to meet the long-term
financing needs.
LIQUIDITY RISKS
The adjacent graph J discloses expected future cash-flows including
derivatives related to financial liabilities. Capital flow refers to expected
payments of loans and derivatives, see note 22. Expected interest flow
refers to the future interest payments on loans and derivatives based on
interest rates expected by the market. The interest flow is recognized
within cash flow from operating activities.
In addition to derivatives included in capital flow in the table there are
also derivatives related to financial liabilities recognized as assets, which
are expected to give a future capital flow of SEK 0.8 billion and a future
interest flow of SEK 3.2 billion.
Read more about the maturity structure of bond loans and other loans, as
well as granted but unutilized credit facilities in Note 22.
Read more about contractual term analyses of the Volvo Group’s future pay-
ments from non-annullable financial and operational lease contracts in Note 14.
Future cash-flow including derivatives related to non-current
and current financial liabilities
Capital flow, SEK bn
Interest flow, SEK bn
2019
(5.0)
(0.3)
2016
(16.0)
(1.1)
2017
(14.9)
(0.7)
2018
(0.5)
(0.2)
2015
(17.5)
(1.7)
2014
(27.6)
(3.2)
2013
(50.3)
(4.6)
(
50)
0
(
40)
(
30)
(
20)
(
10)
J
Goals and policies in financial risk management (cont.)
NOTES TO FINANCIAL STATEMENTS
FINANCIAL INFORMATION 2012
108