This case requisites to be approached from a bank lending officer’s come out of view. There is no one given answer quite a several different approaches to this case study.
Basically, you need to determine the beat out empirical study and thence formulate recommendations to either work the line of credit sought by Dawson Stores Inc, or lineage to do so based on the accounting breeding that has been provided by them.
From what I have read and researched, I would powerfully recommend that you start off by determining the starting time capitulum / focus of your empirical study of this case.
In my opinion, I would focus on the current assets section of the statement of fiscal position since it provides the fundamentals of the companionship’s need for the loan.
The need for cash or working capital has to come from the company’s current position. Has the inventory or receivables reached a point where they are not turning fast enough to stand up the cash outlay. In other words, determine whether the relationship amongst receivables, inventory and cash are out of sync. Is it the case with Dawson Stores Inc.?
If so, then the need for an increase in receivables and inventory (with the loan) is deemed necessary.
Basically, you don’t want to lend money where it is not needed or does not serve any significant purpose in the company’s operations.
Compute the following ratios: current, acid, debt / equity, sales / receivables, sales / inventory, profits / equity and payables / purchases. The first five ratios are elementary to all companies, whilst the remaining is specific to this case study. Look at the trend of specific ratios rather than the absolute value of the fiscal ratio.
In my opinion, Dawson Stores Inc. is a strong candidate as a loan recipient.If you want to get a full essay, hostel it on our website: Orderessay
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