Question: we must find the inventory Part 2: Problem Solving A financial services provider that provides computer software systems approaches you. The company started off as


Part 2: Problem Solving A financial services provider that provides computer software systems approaches you. The company started off as a small private company and has grown strongly over the past fifteen years and listed on the Australian Stock Exchange. The company has businesses in many offshore locations, all of which are well-developed capital markets. In some parts of the world, the company has near-monopoly markets. As part of its strategy, the company uses acquisitions rather than growth to continue to expand the business. While the business is software based, it relies on continued activity in the financial markets. The company has had the same management over the past fifteen years and the senior management team are shareholders in the company The company is rated 886 and its bonds are trading at 3.3 per cent above the comparable government bond rate (5%). These rates are for a 1-year period. Page 1 of The condensed financial accounts are as follows: SM Total current assets Totalfixed assets 1.005.4 Total wets 1.071.7 Total current liabilities 1973 Total noncurrent liabilities 243.7 Total abilities 4410 Shareholders' equity 546.7 Retained earings 84.0 Total Equity 6307 Total Habilities and equity 1.071.2 Earnings before interest and tax are $151,608,000 on sales of $742,613,000. The firm is requesting a loan of 150 million to assist further acquisitions Ratio industry averages 1. Current ratio 3 2. Inventory turnover ratio 6 1. Net profitto sales ratio 0.15 4 Debt to Equity ratio 04 Questions: 1 Carry out a credit analysis on an expert basis. Character Capital Cash capacity (the above cited ratios Condition 2 Carry out a credits on a market remium a. Calculate the probably dumingala maturing in 1 year Calculate the risk premium if you that the recorreth oldefault is 20 Suppose that the company requested a loan for two years Government bond rate for 2 years is 6% and company bond rate for 2 years is. S. Calculate the comitive probability of default use the comet method to the dhe lending institution foes the maximum acceptable cumulative probability of deats 2%, siis to grant the loan to the com Using Altman Zscore, what is the indication of credit risk? 4 Having carried out the above analysis, carefully outline the benefits and disadvantages of lending to this company. What would be your final decision Part 2: Problem Solving A financial services provider that provides computer software systems approaches you. The company started off as a small private company and has grown strongly over the past fifteen years and listed on the Australian Stock Exchange. The company has businesses in many offshore locations, all of which are well-developed capital markets. In some parts of the world, the company has near-monopoly markets. As part of its strategy, the company uses acquisitions rather than growth to continue to expand the business. While the business is software based, it relies on continued activity in the financial markets. The company has had the same management over the past fifteen years and the senior management team are shareholders in the company The company is rated 886 and its bonds are trading at 3.3 per cent above the comparable government bond rate (5%). These rates are for a 1-year period. Page 1 of The condensed financial accounts are as follows: SM Total current assets Totalfixed assets 1.005.4 Total wets 1.071.7 Total current liabilities 1973 Total noncurrent liabilities 243.7 Total abilities 4410 Shareholders' equity 546.7 Retained earings 84.0 Total Equity 6307 Total Habilities and equity 1.071.2 Earnings before interest and tax are $151,608,000 on sales of $742,613,000. The firm is requesting a loan of 150 million to assist further acquisitions Ratio industry averages 1. Current ratio 3 2. Inventory turnover ratio 6 1. Net profitto sales ratio 0.15 4 Debt to Equity ratio 04 Questions: 1 Carry out a credit analysis on an expert basis. Character Capital Cash capacity (the above cited ratios Condition 2 Carry out a credits on a market remium a. Calculate the probably dumingala maturing in 1 year Calculate the risk premium if you that the recorreth oldefault is 20 Suppose that the company requested a loan for two years Government bond rate for 2 years is 6% and company bond rate for 2 years is. S. Calculate the comitive probability of default use the comet method to the dhe lending institution foes the maximum acceptable cumulative probability of deats 2%, siis to grant the loan to the com Using Altman Zscore, what is the indication of credit risk? 4 Having carried out the above analysis, carefully outline the benefits and disadvantages of lending to this company. What would be your final decision
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
