You are a Corporate Credit Analyst for your bank. A new corporate customer in the manufacturing sector approached your bank for a large credit facility in the sum of $20 million for production equipment and warehousing. The customer submitted the following financials to you. List two strengths and two weaknesses of the borrower in relation to credit. Year Ended30-Sept-1930-Sept-2030-Sept-21Assets ($)Current AssetsCash And Cash Equivalents6,714,0004,851,00015,982,000Short Term Investments27,447,00032,900,00044,610,000Net Receivables11,256,0008,881,0007,987,000Inventory1,478,000491,000421,000Other Current Assets2,115,0001,614,0001,566,000Total Current Assets49,010,00048,737,00070,566,000Long Term Investments9,232,00011,004,00012,210,000Property Plant and Equipment3,044,0002,346,00012,326,000Goodwill3,866,0003,309,0003,115,000Intangible Assets539,000499,000569,000Accumulated AmortizationOther Assets3,906,0004,920,0003,603,000Total Assets69,597,00070,815,000102,389,000

Answered: Year Ended 30-Sept-19 30-Sept-20…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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You are a Corporate Credit Analyst for your bank. A new corporate customer in the manufacturing sector approached your bank for a large credit facility in the sum of $20 million for production equipment and warehousing. The customer submitted the following financials to you.

List two strengths and two weaknesses of the borrower in relation to credit.

Year Ended
30-Sept-19
30-Sept-20
30-Sept-21
Assets ($)
Current Assets
Cash And Cash Equivalents
6,714,000
4,851,000
15,982,000
Short Term Investments
27,447,000
32,900,000
44,610,000
Net Receivables
11,256,000
8,881,000
7,987,000
Inventory
1,478,000
491,000
421,000
Other Current Assets
2,115,000
1,614,000
1,566,000
Total Current Assets
49,010,000
48,737,000
70,566,000
Long Term Investments
9,232,000
11,004,000
12,210,000
Property Plant and Equipment
3,044,000
2,346,000
12,326,000
Goodwill
3,866,000
3,309,000
3,115,000
Intangible Assets
539,000
499,000
569,000
Accumulated Amortization
Other Assets
3,906,000
4,920,000
3,603,000
Total Assets
69,597,000
70,815,000
102,389,000

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