aframeworkforcreditanalysis加拿大著名咨詢公司在

AFrameworkforCreditAnalysisI. RiskAssessmentII. TheClient’sFunding NeedsIII. LoanStructuringIV. LoanManagement1I. RiskAssessmentMonitoringtheEconomicEnvironmentAnalyzingIndustryConditionsAssessingaClient’sMarketingManagementAppraisingtheClient’sOperationsManagementEvaluatingManagementCapabilitiesandCharacterAnalyzingtheBorrower’sFinancialManagement2MonitoringtheEconomicEnvironmentMuchoftheriskassociatedwithaloanisduetobroadeconomicforcesasshownonthenextslideLendermustmanageitsexposuretocertaintypesofbusinessesLendermayhavetocurtaillending,eventobusinesseswithagoodtrackrecord,inperiodsofeconomicadversityNecessarytomonitorthecurrentandforecastedeconomicenvironment3TheEconomicEnvironment-Cont.KeyelementsoftheeconomyEconomicgrowth-thebusinesscycleInflationratesInterestrates-thelevel,termstructureandriskstructureGovernment-politicaltrendsandcurrentfiscalandmonetarypoliciesInternationalrelationships-balanceofpayments,currencyvalue,internationalmarkets4TheEconomicEnvironment-Cont.Itisimportantforthelendingofficertokeepontopofbroadeconomicconditionsbecauseoftheirpotentialimpactonthebank’sclientsandthequalityoftheofficer’sloanportfolio5AnalyzingIndustryConditionsAborrower’sfinancialperformancedependson:

CurrentconditionsandprospectsforitsindustryHowwellthecompanyispositionedrelativetothecompetition?Itisnecessarytounderstandboththerisksandopportunitiesforthemajorindustrysectorsinthebank’smarketDeterminetwofactors:Aretheindustry’sprospectsattractive?Whichtypesoffirmsaremostlikelytosucceedintheindustry?6AnalyzingIndustryConditionsBanksnowcreateportfoliomanagementgroupsMonitorindustryconcentrationsinthebank’sloanportfolioDeterminefutureprospectsforkeyindustriesSetlimitsonthemaximumexposurethebankwillpermitforanindustryorspecificborrowerRiskclassificationsystems-usedtoassignanumericriskratingtoallborrowersorloanrequests.Industryconditionsformpartofthisriskrating.7FactorsaffectingIndustryConditionsMichaelPorter’sModelEaseofEntryAvailabilityofSubstituteProductsBargainingpowerofbuyersandsuppliersCompetitiverivalry.Rivalrytendstobegreatestwhentherearenumerouscompaniesproducinglargelyundifferentiatedproductsorservices.Dependenceonotherindustries8AssessingaClient’sMarketingMarketingisacriticalfactorformostborrowers,especially“start-ups”,thoseenteringanewbusinessorfacingtoughcompetitionFirmshouldhaveaplanwhichcovers:ProductPoliciesPricePoliciesPromotionPersonalSellingActivitiesDistributionPolicies9AppraisingtheClient’sOperationsManagementOperationsmanagement-thesetofactivitiesrequiredtotransforminputssuchasrawmaterialandlabourintothefinalproduct.Majorcomponentsofoperationsinclude:Quality-valueformoneyProcessDesign-technology,plantlayoutFacilitiesPlanningandSchedulingInventoryManagement-howmuchisnecessarytocarry?Employeemanagement10EvaluatingManagementCapabilitiesandCharacterDeterminetheexperienceandskillsofkeyprincipalsThisincludestechnicalknowledge,contacts,resourcesinmarketing,operationsandfinanceplusskillinmanagingandmotivatingothersAssessmanagement’scharacter:integrity,financialconservatismandrespectforcreditors11AnalyzingtheBorrower’sFinancialManagementStrongfinancialmanagementisanessentialingredientforsuccessFinancialcapacityisthecompositeofmanagementpoliciesandpracticesinseveralareas:Isthereadequateliquidity?Thefirm’srelationshipswithtradecreditors,lendersandinvestorsTheequitycapitalcontributedbytheownersTheextentoftheowner’swithdrawals12Borrower’sFinancialManagementcont’dCalculatekeyfinancialratios 1. Profitabilityratios 2. Assetutilizationratios 3. FinancialcapacitytestsWhichratiostocalculatewillvarywiththetheindustryandtypeofbusiness(example-serviceormanufacturing)13ProfitabilityRatiosProfitMargin:Netprofitaftertax/netsales.GrossProfitmargin:Theportionofrevenuesremainingafterthecostofsales.(NetSales-CostofSales)/NetSalesSalesGrowth:Measuredovertime.Usuallyexpressedasa%growthperyear.ReturnonAssets:

NetProfit/TotalAssets.Thismaybedistortedduetotheageofthefirm’sassets.14ProfitabilityRatiosReturnonEquity=NetProfit/TotalEquity Thismeasurestherateofreturnonthecapitalprovidedbyequityinvestors.Equityincludescommonstock,retainedearnings,andminorityshareholders’interestBanksnormallyrequireanagreementfromtheownersthatequityfundswillnotbewithdrawnwithoutthebank’spriorpermission15AssetManagementRatiosTurnoverofCurrentAssets.Daysofinventory=Inventory/(CostofSales÷365days).Thisshowshowcarefullymanagementiscontrollingit’sinvestmentininventory.Costofsalesisusedtoensurethatbothgoodssoldandinventoriesarecomparedonthesamebasis,namelyatthecostofpurchaseorproduction.

16AssetManagementRatiosCollectionperiodforReceivables=AccountsReceivable/(NetCreditsales÷365)TellsushowquicklyAccountsReceivablesarecollectedInaddition,thelendershouldobtainanagingschedulewhichclassifiesAccountsReceivablebyhowlongtheyhavebeenoutstandingForexample,ifthebusinesssellsonnet30daysthenmostreceivablesshouldbenolongerthan30days17TypicalAgedAccountsReceivableSchedule

0-30days 31-60 61-90 90+GradeACompanyInc 12,000AGoodBet&Associates 23,000NotSoBadCo. 4,500APoorDealInc. 6,000

FlybyNightLtd. 99918AssetManagementratio-cont’dIfalargenumberofcustomershavenotpaidfor40or50daysorlonger,thenthecompanymaybelaxincollectingoverdueaccountsorhasextendedcredittocustomerswhohavedifficultypaying.Olderreceivablesmayindicatethatthequalityofthereceivablesissuspect.Thismeansthatthebankmaynotbeabletocollectallofitsreceivablesiftheborrower’sassetsneededtobeliquidated.19FinancialCapacityRatiosThefirmmustbesufficientlyliquidtomeetitsrecurringcommitmentsandhaveadebtstructurethatcanbeservicedfrombothitsprofitsanditscashflowsLiquidityMeasures:CurrentRatio=CurrentAssets/CurrentLiabilitiesIsagoodmeasureofsolvencyasitindicatestheextenttowhichclaimsofshort-termcreditorscanbecoveredbyliquidassets20FinancialCapacityRatiosQuickratio=(Cash+ShortTermsecurities+receivables)/CurrentLiabilitiesShowsthemostliquidassetswhichcanbeliquidatedtomeetshort-termobligations21FinancialCapacityRatiosDebtRatiostellushowmuchfinancialleveragethefirmhas.Higherleverageincreasestheriskoftheloanandwhetherthefirmwillbeabletoserviceitsinterestandprincipalpayments.Theamountofequityinvestedsignalsthecommitmentofthemajorshareholderstothebusiness.22FinancialCapacityRatiosContinuedDebttoAssets=(CurrentLiabilities+Long-termdebt)

Assets*Measurestheproportionofassetsfinancedbyotherpeople’smoneyincludingthebank.DebttoEquity=(CurrentLiabilities+long-termdebt)(Totalequitycapital+postponedshareholder’sloans) *Measuresthedebtrelativetotheinvestmentoftheowners.InterestCoverageRatio=(Earningsbeforeinterestandtaxes)/interest.*Thismeasuresafirm’sdebt-worthinessanditsabilitytomeetinterestpaymentsoutofrecurringprofit.23SummaryofFinancialRatioAnalysisProfitabilityRatios:NetProfitMargin NetProfit/SalesGrossProfitMargin GrossProfit/SalesReturnonAssets NetProfit/SalesReturnonEquity NetProfit/EquityAssetManagementRatios:TotalAssetsTurnover NetSales/TotalAssetsFixedAssetsTurnover NetSales/NetFixedAssetsDaysofInventory Inventory/(Costof Sales÷365)24FinancialRatiosContinuedAccountsReceivableCollectionPeriod AccountsReceivable(AverageDailySales)FinancialCapacityRatios:Currentratio CurrentAssets/CurrentLiabilitiesQuickratio (CurrentAssetslessinventoryless prepaidexpenses)/Currentliabilities 25FinancialRatiosContinuedFinancialCapacityRatios(Continued):Accountspayablepaymentperiod=Accountspayable/ AveragedailypurchasesDebttoassetsratio=TotalDebt/TotalAssetsInterestCoverage= (Earningsbeforeinterestandtaxes) Interest26CashFlowAnalysisThepurposeofariskassessmentistojudgethecompany’sabilitytoserviceitsobligationstothebank.Aborrower’srepaymentcapacityisprimarilydeterminedbythecashflowsthatthebusinessgeneratesThemajorsourcesandusesofcashinthebusinessmustbeidentifiedtopredictfuturecashflowsStatementofchangesinfinancialpositionareprovidedaspartofthecashflowstatementsTellswherethecashiscomingfromandwhereitisbeingused:operating,investingandfinancingactivities27II.TheClient’sFundingNeedsEstimatingTotalFinancingNeedsIdentifyingNon-BankSourcesofFinancing28EstimatingTotalFinancingNeedsAbankerhastoidentifythetotalfundingthatthecompanyrequirestosupportitscurrentoperationsandtocarryoutitsplansforexpansion.Themajormethodsofforecastingafirm’sfinancialneedsCashFlowbudgetsProformafinancialstatementsTheloanfacilitymustbesetatalevelthatisbothrealisticforthecompany’sneedsbutisnotexcessiverelativetotheavailablecashflows29FinancingNeedsFinancialforecastsmustbepreparedbymanagementoranoutsideaccountantandthebankercanonlyassessthereasonablenessoftheforecasts.Providesboththeamountandtimingofthefirm’sneedsHelpsthebankerbetteranalyzetherisksassociatedwithaloanrequest.Sensitivityanalysisshouldbedonewheretheforecastsarepreparedusingdifferentassumptionsaboutfutureevents30FinancingNeedsBankerstoooftenseeloanapplicationsonlyafterfinancialneedshavebecomeimmediateandurgent.Financialforecastsprovidethebankwithcheckpointsformonitoringaborrower’sprogressandperformance.Anunanticipatedneedisnotnecessarilybad.Itcouldalsoindicatethatthefirmhasfoundanewbusinessopportunitytopursue.31CashFlowForecastsCashflowforecastestimateswhenandinwhatamountscashwillflowinandoutofthebusinessCashbudgetsareusefulforshorttermforecastsandforthosecompanieswithseasonalsalesandproductioncyclesPrepareCashReceiptsbasedonprojectedsalesandthenpreparecashoutlayswhicharecloselylinkedtothesalesforecast.32

SampleCashBudget 33ProjectedFinancialStatementsApproximateforecastscanbedevelopedbyapplyingthecompany’sexistingbalancesheetandincomestatementratiostoestimatesoffuturesalesvolumes.Extendforecastsseveralyearsintothefuture

ForecastedIncomeStatementsAreusuallythestartingpointindevelopingaproformastatementManyvariablessuchasinventories&accountsreceivablesmovecloselywithsales34ProjectedFinancialStatementsStartwithforecastingtheestimatedsalesgrowthrate.Rawmaterialcosts,labourexpensesandproductionsuppliesasapercentageofsalesareforecastedtoremainatcurrentlevels.UsuallythebalancesheetismoredifficulttoforecastthananincomestatementEstimatesarerequiredandmaynotberelatedtoasinglekeyvariablesuchasthesalesfigure35ProjectedFinancialStatementsAccountsreceivableandinventoryaretiedtosales

EstimatetheaccountsreceivablebalancebasedonthepastcollectionexperienceEstimateinventoriesbasedonthetypicalinventorylevels.EstimatetheplannedpurchaseofnewplantandequipmentlessdepreciationAccountspayableforecastshouldincorporatethecompany’splannedpurchasesofrawmaterialsanditspaymentpractices36ProjectedFinancialStatementsCashandNotespayableshouldbeadjustedtobalancebothsidesofthebalancesheet.Cashaccountissetatanamountthatthecompanybelievestobeareasonableworkingbalance.Oncethecashaccountisforecasted,thebankloanpayablecanbecalculatedtofindtheamountthatmakesthebalancesheetbalance.Thisisknownasthe“plug”figure.Thisbalancingfigurerepresentstheclient’sfundingrequirementtosupporttheforecastedlevelofassets.37ProjectedFinancialStatementsForecastsshouldbeconstructedwithdifferentbasicassumptions.Sensitivityanalysiscouldtestthefollowing:1. Slowdowninthecollectionofaccountsreceivable2. Declineininventoryturnoverrate3. Unanticipatedexpansionoffixedassets4. Higherexpensesthanplanned5.Lowersaleslevelsthanpredicted6. Tradecreditorsdemandingfasterpayment38IdentifyingNon-BankSourcesofFinancingThreebroadsourcesoffundsareavailabletothefirm:1. Fundsgeneratedbythefirmbyincreasingtheworkingcapita.lA. Shortencredittermsandincreasethequalityofcustomersreceivingcredit(usebetterscreening).B. Reducecompanyinventorylevelsandslowpaymentofaccountpayables(wherepossible)C. Improvefinancialplanning-cashflowbudgeting39IdentifyingNon-BankSourcesofFinancing2. Externalbusinesssources-

PersonalAssetsFriends,familyandemployees-“l(fā)ovemoney”InformalInvestors-privateindividualsFactoring-afirmthatactsasthecreditandcollectionsdepartmentLeasingFranchisingorVentureCapitalOthertermlenders-eg.GECapitalPublicEquityMarkets40IdentifyingNon-BankSourcesofFinancing3. ExternalgovernmentSourcesGrantsForgivableLoansDirectloansGovernmentGuaranteesTaxbreaksDirectequityinvestmentsinthefirm41PartIII.LoanStructuring1. IdentifyingtheAmountandFormofBankFinancing2. LendingandtheLegalEnvironment3. SecuringtheLoan4. LendingandEnvironmentalLaw5.PricingtheLoan6.Designingtheloanagreementandloancovenants42TheAmountandFormofBankFinancingTheInitialScreen-Isthedeal“bankable?”.Doesithaveacceptablerisksrelativetothereturn?Isthereturnadequatetocompensatefortherisksaccumulatedandthecostofservicingtheaccount.Banksareinthebusinessofgrantingloansthattheyconsidertoberelativelylowrisk.PreparealistofprosandconsTurningdowntheloanshouldincludeafrankdiscussionofthecompany’sproblemsandoptions43TheAmountandFormofBankFinancingSettingtheloanlimitDeterminetheclient’sabilitytopayCashflowsarederivedfrominternallygeneratedfunds.Long-termloanscanonlyberepaidfromprofitsifthebusinessistoremainaviableentity.Enforcedliquidationofthecompany’sassetsisa“fall-back”position,shouldcashflowsfromoperationsfallshortofrequirementsInjectionofowner’scapital-isitavailableifneeded?Collateralsecurity-determinethelendingvalueofaccountsreceivableandinventoryorthevalueofthefixedassets44TheAmountandFormofBankFinancingBanksnormallyfinance75to80percentofthecostoffixedassets100%financingmaybewarrantediftheassetscouldbereadilysoldattheirpurchasepriceorifthecustomerhasadditionalcollateraltosupporttheloanTheamountoftheloanshouldbesufficienttomeetthecustomer’sfinancialneeds45TheAmountandFormofBankFinancingTheRepaymentTermThetermoftheloanisthetimeperiodduringwhichtheloanpaymentsarefixed.Theamortizationperiodistheperiodoverwhichtheloanisscheduledtoberepaid.Forexample,someonepurchasingahousemayhaveamortgagewithatermof5yearsbutamortizedover25years.RepaymentperioddependsonwhatthemoneyisbeingusedforTransactionloansarefortemporaryfunding-eg.abridgeloan46TheAmountandFormofBankFinancingOperatingloans(floatingprimebasedloans)areusedtofinanceacompany’saccountsreceivableandinventoryandfluctuateasthefirmmovesthroughdifferentsellingseasonsLetterofcredit-saysthatthebankwillpayacertainsumonthedeliveryofspecificdocumentstothebank.Theyarecommonlyusedforinternationaltrade.Whenthebankpays,theywillthenrequirepaymentfromtheborrowerTermloans-usedtobuyspecificfixedassetsandwillbepaidoutovertimefromthecashflowstheassetgenerates47LendingandtheLegalEnvironmentAsecuredcreditorisonewithspecificlegalrightsagainstparticularassetsofthedebtorwhichmaybeexercised,shouldthedebtorfailtofulfillpromisesgiventothecreditorAnunsecuredcreditorisanyonetowhomthedebtorowesmoney-theunsecuredcreditorhasnospecificrightsagainstthedebtor’sproperty,otherthanthegeneralrighttosueforenforcementofthedebtor’spromisetopay.Abasicunderstandingofthelegalsystemisessentialtothosemakingdecisionsoncommercialcredit48SecuringtheLoanRoleofcollateralsecurityinvolves3tasksDetermineavailableassetsthatcouldbepledgedascollateralandestimatetheirnetrealizablevalueasasecondarysourceofrepayment.Beknowledgeableoftheproceduresfordocumentingandregisteringasecurityinteresttoensurethatthebank’sinterestareprotectedMonitortheborrower’scollateralpositionovertime49LendingandEnvironmentalLawLegislationmayincreasedefaultriskinseveralwaysLegislationwhichrestrictshowaborrowercancarryonitsbusinesseg.controlsonemissionsorwastedisposalincreasesthecostofrunningabusinessThevalueofthesecuritymaybediminishedbyenvironmentaldamagetocollateralsecurityIfthelenderassumescontrolsoftheborrower’sassets,thelendermayfacethecostofcleaningupthesiteunderenvironmentallegislation.Suchcostsmaywellexceedthevalueoftheloan.Ifenvironmentalriskisaconcernfromthestart,itmaybebettertodeclinetheloan.50PricingtheLoan Abankseekstoearnapositivemarginbetweenwhatitearnsonallofitsfinancialassets(primarilyloanstobusinessesandconsumers)andthecostofitsfunds(deposits).Netinterestincomeiscriticaltoabank’sprofitability!FactorsintheloanpricingdecisionincludePerceiveddefaultriskontheloanCostofhandlingtheaccountProfitabilityoftheentirerelationshipincludingfeeschargedNegotiatingabilityoftheborrowerandaccountmanagerCompetitiveconditionsbetweenfinancialinstitutions51PricingtheLoanTakeintoconsiderationthetypeofriskratingsystem.Whichkindsofloansareexcellent,verygood,goodandacceptable?Considerthebank’srequiredreturnoncapital.Typically15-20%ROE.Capitalisthelongtermfundsinvestedinabankintheformofdebenturesandvariousformsofequity.Thegreatertherisk,thegreaterthereturndemandedbythesuppliersofcapital52DesigningloanagreementsandloancovenantsAloanagreementisacontractbetweenaborrowerandalenderwhichlaysouttheconditionsoftheloanLoanagreementscanvarybutwilltypicallyincludethefollowing:IdentifiestheBorrowerTheAmountThetypeoffacility;operating,revolvingortermAdvancesandConditionsPrecedentPurposeTermInterestRate53DesigningloanagreementsandloancovenantsLoanAgreements(continued)RepaymentScheduleCollateralSecurityRepresentationandWarranties-statementsoffactabouttheclientwhichthebankhasassumedtobetruewhenmakingtheloanoffer.Forexample,theexistenceofcertaincontracts.Covenants-guidelineswhichtheborrowerpromisestofollowinthefutureoperationofthebusinessEventofdefault-theeventswhichleadtoadefaultoftheagreementCostsandPricing

54DesigningloanagreementsandloancovenantsImportantCovenantsmayinclude:Submissionoffinancialstatements-interimmonthlystatementsandfinalannualstatementsSubmissionofotherdata-forexample,monthlyaccountsreceivablereportsMaintenanceofliquidity-maintaincertainlevelsofworkingcapitalandratiosMaintenanceofassets-maintainassetsingoodconditionMaintenanceofmanagementandownershipwithoutpriornotificationtothefinancialinstitution55DesigningloanagreementsandloancovenantsInsuranceCoverage-eg.fireandtheftinsuranceovercompanyassetsMaintenanceofacertainnetworthortheratioofequitytodebtNegativeCovenants-preventtheclientfromtakingactionsunacceptabletothebank.Someexampleinclude:LimitondebtRestrictionsondisposalofassetswithoutpriornotificationtothebankRestrictionsonchangesinthenatureofthebusinessincludingacquisitionsandmergers.56DesigningloanagreementsandloancovenantsNegativeCovenantscontinuedRestrictiononassetpurchaseorinvestmentsLimitonsalariesanddividendsGuidelinesinSettingCovenantsAllbanksprovidetheirlendingofficerswithaspecimenloanagreementwhichoutlinesthemostcommontermsandcovenants.Thebankermustthentailortheloanagreementtotheneedsandrisksofhisclient.57PartIV.LoanManagementMonitoringtheLoanManagingProblemLoans58MonitoringtheLoanMonitoringinvolvesasetofactivitiesaimedatensuringthatanoutstandingloanisbeingrepaidasscheduled,theclient’sabilitytorepayisnotdeterioratingandthecollateralsecurityisbeingmaintained.Whatshouldbemonitored?Daytodayoperations-cashflowsTheacquisitionandsaleofassetsThetakingonorrepaymentofliabilities59MonitoringtheLoanMonitorCashFlows-regularfinancialstatements,clientmeetingsandfollowingeconomiceventswhichmayinfluencetheclient’sbusinessMonitortheClient’sAssets

-financialstatements,accountsreceivable&inventoryreportsandvisitstothecustomers,pluspersonalfinancialinformationforsmallbusinessownersMonitorclientliabilities-toseewhatthecompetingclaimsare.Dothiswithfinancialstatementsandwithperiodicsearchesatkeyregistryoffices60MonitoringtheLoanTheannualrevie