...Operating Trends Continue Decline: Avon Products, Inc.'s (Avon) recent downgrade in May 2015 reflects the continuing negative trend of two key metrics that are critical to a direct-selling organization: representative and volume growth. Both indicators have been negative for at least nine quarters and efforts to stabilize the business have not been successful. The lengthy turnaround increases the company's financial risk. Fitch Ratings' Negative Outlook is based on the company's trajectory and uncertainty with regard to management's ability to stabilize operations. Liquidity Strong, but Declining: Cash balances are unrestricted and available for debt repayment, but have declined to $670 million at the end of March 2015 from $1.2 billion as recently as year-end 2012. On June 5, 2015, Avon terminated its $1 billion unsecured revolving credit agreement and replaced it with a $400 million secured five-year facility. With that, the company's overall liquidity has declined to approximately $1.1...
