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Essay / Research Paper Abstract
A 16 page paper with additional accompanying spreadsheets (9 pages), the purpose of which is to assess the company’s credit worthiness for two requested loans. The spreadsheets construct a 12-month pro forma cash budget for an upscale retailer, as well as an income statement, balance sheet and ratio analysis. The text portion includes some explanation of determinations for the pro forma cash budget and a summary report assessing the wisdom of extending the loans to the company. Recommendation is that the lender provide the company with all of the funds it requests, and in the form it requests. Spreadsheet data included as appendices; actual spreadsheets including formulas are available. Bibliography lists 1 source.
Page Count:
16 pages (~225 words per page)
File: CC6_KSfinEndZone.rtf
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Unformatted sample text from the term paper:
The owner of The End Zone, an upscale retailer, is seeking two separate types of financing for the upcoming year. The attached spreadsheets - Cash Budget, Income Statement, Balance
Sheet and Ratio Analysis - have been developed to assist in the banks financing decision. Following are notes on how several of the values were calculated and presentations favoring
two additional loans to the company. Notes Calculating the Cash Budget Forecast Sales. Total sales in 2004 were expected to be $6,610,950,
and were expected to be 8% higher in 2005. In 2006, total sales were expected to increase another 10%. Therefore the monthly sales are calculated on $7,139,826 total
for 2005 and $7,853,809 total for 2006. Each months forecast sales result from multiplying the expected annual total by the seasonal index value for each month, dividing the result
by 12. Cash and Credit Sales Totals. From page 3, the bank expects bank credit card purchases to be 50% of total
sales; store credit card purchases to be 45%; and cash sales to be 5% of total sales. Accounts Receivable. This is constituted
solely by store credit sales. The case states that 72% will be collected in the month following sales; 17% will be collected after two months and 8% will be
collected in the third month. The remaining 3% is considered to be uncollectible and becomes an expense. Bank card returns and bad
debt. January 2005 (given) shows a figure equaling 1.2% of October 2004s total bank credit card sales. This value is calculated by multiplying each months bank credit card
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