The Baldwin Piano Master Case illustrates the fortunes of a company that has fallen on difficult and has just renewed it revolving line of credit with a lender. The case follows the informal discussion and outline of a credit memo but stops short of loan
On the 300th anniversary of the modern Piano, Baldwin Piano is struggling to survive. It is the perfect Turnaround case. When we first looked at Baldwin’s numbers and its historical performance, we saw a dying industry, a shrinking market, cheaper imports, bad investment bets, distracted
While the Credit Analysis course started the discussion on financial and operating leverage and the thinking behind the borrowing decision, the Credit Process course focuses on the lending side of the equation. Master Class: Credit Process: Mindset Master Class: Credit Process: Understanding the language –
In this session we will work with the Cash Flow Statement of Office Depot and see what the numbers tell us. Office Depot is a retailer of office supplies in the US market. Remember that the statement shows what the firm’s beginning and ending cash
Credit Decision Factors. Industry analysis Industry analysis is more subjective than quantitative in nature. Two analysts can agree on the broader outlook for the same industry, but still differ on the impact of that outlook on a specific business. We will settle for the fact
The credit decision. We have now seen a reasonable amount of information on Willy Whale Inc, our friendly, next-door stuffed toys manufacturers and distributor. A credit memorandum using the same information has been prepared and presented before the loan committee. It is now time to
Credit Culture. Organizations have formal and informal processes in place for getting things done. Credit culture refers to the comfort level developed within a lending institution, over the years with a number of issues and factors. What policies does the bank have (in writing or
The context for credit risk analysis Financial institutions and investors make money by putting capital at risk. The underlying idea is fairly simple – returns from this exercise will not just compensate them for bearing the risk but will also allow the original capital base
Lending Products Let’s review the list of products available in financial markets to meet the lending needs of a business. An understanding of customer needs and how those needs are met is important before we get into now credit analysis works. Commercial Banks, Institutional Investors, private
Why do businesses borrow money? Let’s start with the need! Why do firms borrow money? If you think about it there are actually two separate questions. The first question is why does the firm need money – as in what will the money be used