What would be the amount of a bank loan a year from now

Assignment Help Financial Accounting
Reference no: EM132941024

Question - Bank Loan Considerations: Assume you started a new business last year with $50,000 of your own money that was used to purchase equipment. Now you are seeking a $25,000 loan to finance the inventory needed to reach this year's sales target. You have agreed to pledge your venture's delivery truck and your personal automobile as support for the loan. Your sister also has agreed to cosign the loan. During your initial year of operation, you paid your suppliers in a timely fashion.

Analyze the loan request from the viewpoint of a lender who uses the "five Cs" of credit analysis as an aid in deciding whether to make loans.

Capacity to pay: Assume you are currently carrying an accounts receivable balance of $10,000. How might you use accounts receivables to obtain an additional bank loan?

Assume at the end of next year, you will have an accounts receivable balance of $15,000 and an inventories balance of $30,000.If a bank normally lends an amount equal to 80 percent of accounts receivable and 50 percent of inventories pledged as collateral, what would be the amount of a bank loan a year from now?

Reference no: EM132941024

Questions Cloud

Define performance management : Define Performance Management by two authors Herman Aguinis and Tamra Chandler
Advantages of integrating the functions of the hr division : What are the advantages of integrating the functions of the HR division, training division, and those of the work group supervisors?
What circumstances would reclassification be considered : What circumstances would this reclassification be considered ethical or unethical? Support your selection by finding an article which explains your choice.
Should be compelled to wait a negotiated period : Suppose an executive chef or vice president, Should he or she be compelled to wait a negotiated period of time before working for a competitor? Why or why not?
What would be the amount of a bank loan a year from now : Assume at the end of next year, you will have an accounts receivable balance of $15,000. What would be the amount of a bank loan a year from now
Explain firm-specific human capital : 1. Give one example of a widely known business with a low-cost provider strategy. Briefly describe how that strategy would likely affect its HRM practices in re
What is the stockholders equity to debt ratio for the data : What is the stockholders' equity to debt ratio for the data? Total current liabilities (noninterest bearing) - $300,000; bonds payable, 5% (issued in 2007)
How are ec educators more than nurturers : How are EC educators more than nurturers and facilitators of play?
Solve the accumulated value of investment at the end : Christine invested $2,100 at the beginning of every 6 months in an RRSP. Calculate the accumulated value of his investment at the end of the first 7 years.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Explain to about assessment in school

Explain to about assessment in school? what is the item you usually used in assessment? how the format in order to make examination paper for student

  Find how much overhead will be assigned

Find how much overhead will be assigned. The Milling Department logs 1,400 machine hours and the Cutting Department shows 3,000 machine

  What if you borrowed to invest a total

What would happen to the expected value and standard deviation of the investment if you borrowed an additional $1,000 and invested a total of $2,000? What if you borrowed $2,000 to invest a total of $3,000?

  What is total stockholders equity as of December

A company reported total stockholders' equity of $170,000 on its balance sheet dated December 31, 2018. What is total stockholders equity as of December

  How much is the capital of Dany after admission of Del

Del is admitted as a new partner into the partnership with 20%interest upon investment of P200,000. How much is the capital of Dany after admission of Del

  Collection of individual regional and departmental heads

3. What suggestion do you have for the CIO to help her turn this collection of individual regional and departmental heads into a top-performing team? Explain.

  What the share premium-ordinary account will be credited for

the ordinary shares were selling for 36 and the preference shares were selling for 28. What The Share Premium-Ordinary account will be credited for

  What is the weighted average number of shares to be used

Bonds convertible into 50,000 shares. What is the weighted average number of shares to be used in the calculation of diluted earnings per share for 20X1?

  How much is the final balance capital of tony

How much is the final balance capital of tony? How much is the distributed loss on realization for boy? ALLOW. FOR BAD DEBTS P 25,000

  Find what is price per share if the firm equity cost

$1.61 this year. If you expect Summit's dividend to grow by 5.8% per year, what is its price per share if the firm's equity cost of capital is 11.2%?

  Compute the amount of gross profit

Compute the amount of gross profit/(loss) in a gross profit/(loss) percentage. Cost of sales 156,000 selling expenses- 41,100 Administrative expenses- 19,900.

  Find what is approximate inventory loss as a result of fire

Sales from January 1 to February 14 - ?2,000,000; Mark up percentage on cost - 25%. What is the approximate inventory loss as a result of the fire?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd