[梅西] 125.361 test 2 我的答案 [复制链接]

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电梯直达

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发表于 2007-10-4 20:53:19 |只看该作者 |倒序浏览 微信分享

复习的时候发现125361的复习资料少的可怜, 所以把这次的考试题放上来, 留做以后的同学参考吧!
答案不一定对,错了的话大家不要笑话我, 是我自己写的,有遗漏的地方欢迎大家补充!

成绩出来了, 10分满分, 给了8分, 所以估计应该没有太大问题了!
Case: Romano Restaurants

Romano Restaurants Pty Ltd is a long-term client of the Ballarat Banking Corporation. It is a privately owned chain of three Victorian Italian restaurants. Gino Romano is the young and recently appointed managing director, and the grandson of the founder, Mario Romano. Mario migrated to Australia from Italy in the late 1950’s, and established the first restaurant in Carlton in 1963, using his accumulated savings and a bank loan secured by a mortgage on the restaurant building. Authentic Italian cuisine, imported Italian wines, and carefully crafted ‘Italian’ Décor and atmosphere led to a rapid market acceptance and a reputation as one of the best Italian restaurants in Melbourne. The loan was rapidly repaid, although the bank has continued to provide overdraft facilities for working capital, and a range of payment and investment services.

The success of the first restaurant led to the establishment of an equally successful second restaurant in South Yarra in 1978, managed by Gino’s father Bruno. This was also funded by a mortgage, which was rapidly repaid.

A third restaurant opened in the Docklands precinct in 2004, managed by Gino, who was brought into the business in 2003, after completing his Bachelor of Business at Monash University. This is funded by a heavy mortgage, as property prices in the Docklands area were much higher than elsewhere in Melbourne. The Romano family now includes three generations of restaurateurs, but there are signs that the modern generation does not have the same work ethic or acumen as its founder. The Docklands expansion was largely driven by Gino, who wanted a high-profile ‘flagship’ presence in the upmarket Docklands area, and a ‘showcase’ for his management skills. This development was opposed by the rest of the family, particularly by Mario, who wanted to retire and hand over the management of the original Carlton restaurant to Gino. The Docklands restaurant has proven to be very costly to operate, and is not yet profitable. It is a financial drain on the rest of the company. As a consequence, Gino has approached the bank for additional finance of $1 million.

The bank’s long-time Relationship Manager for Romano Restaurant has just retired and Joe Papps, the new Realationship Manager, has completed a detailed account review using information provided by Mario’s accountant. Joe’s review has found that Romano Restaurants Pty Ltd:

l
Has not submitted its financial accounts to the bank for the last financial year (i.e. has violated its loan covenants) because its auditors were not prepared to sign off on the accounts, so its current financial status (current ratio, interest cover and so on) is unknown.

l
May not have remitted the full amount of GST owing to the Australians Tax Office in its latest financial year.

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Appear to be 2 months overdue on the most recent quarterly remittance of superannuation guarantee contributions to its employees’ superannuation funds.

A check of the D&B and Baycorp Advantage credit files for Romano Restaurants Pty Ltd shows a number of credit card enquiries from other financial institutions, and one loan from a finance company which is more than 60 days overdue. A personal check on Gino, as a new director of the company, also reveals a number of credit problems. In the last 6 months Gino has acquired a multimillion-dollar inner-city apartment in a Docklands High-rise, financed by vendor finance, and appears to be struggling to maintain the repayments. In addition, property prices in the inner-city apartment market and the Docklands commercial property precinct have fallen by a much as 20% in the last year, and the economic outlook is for this trend to continue.

Questions
1.
Use the 6 Cs of credit to assess the creditworthiness of Romano Restaurants Pty Ltd.
2.
Based on your finding from question 1, what additional information should Joe Pappas ask Romano Restaurants to provide, and what actions would you recommend Joe Pappas to take?

以下是我的答案，自己写的，不一定全对，如果有遗漏的部分，欢迎大家补充。

Question 1: (Chapter 9, p294)

The process of lending begins before a loan is made, and a key part of the lending process involves the 6 Cs of credit which includes: character, capacity, collateral, conditions, and compliance.

1. Character: Bank must know their customer well before they make loans. Character refers to a borrower’s honesty, responsibility, integrity and consistency, from which we can determine from the prior history of repay loans, or the reports from credit bureaus and credit reporting agencies such as Baycorp that mentioned in the case.

For Romano, the report from Baycorp shows that “number of credit card enquiries from other financial institutions, and one loan from a finance company which is more than 60 days overdue.” And “Appear to be 2 months overdue on the most recent quarterly remittance of superannuation guarantee contributions to its employees’ superannuation funds.” This tells us that Romano may have finance problem and may make us question Romano’s current honesty although their prior loans are rapidly paid.

2.
Capacity: refers to if the borrower has the ability to meet financial obligations in its financial condition. Banks generally require prospective borrowers to submit their financial statements and income tax statements in order to determine their creditworthiness.

Due to there are no financial statement of last year provided to the bank, we are unsure about the current performance of Romano’s business. But as we know about the business, Docklands’ restaurant also funded by mortgage likes the first and second restaurants. “The Docklands expansion was largely driven by Gino, it is very costly to operate, and is not yet profitable.” And “One loan from a finance company which is more than 60 days overdue.” Weather Romano has the ability to repay $1 million dollars loan is considerable.

3. Capital: represents the amount of equity capital a firm has that can be liquidated for payment if all other means of collection f the debt fail.
Although Romano has three restaurants and Gino has a personal apartment, we still need to consider how much capital that Romano really has due to the concept of equity capital is a total asset less total liabilities. Because Romano’s three restaurants all are funded by mortgage, so we need to know the balance of their loans and to calculated the net value of their capital.

4. Collateral: refers to assets that are pledged as security in a credit transaction. Because the three restaurants of Romano all are funded by mortgage, it may not be good collaterals depends on the balance of the loan. Although Gino has his personal apartment but because the price of apartment in that area decreased 20% in the last year and trend to continue, therefore, it is not good collateral as well.

5. Conditions: refers to external factors that are beyond the control of a firm but that may affect its ability to repay debts. Because the operation ethics of Romano is changed, Gino is young and lack of experience, his development was opposed by the rest of the family, and Mario wants to retire, this may leads unsmooth operation/development for Romano in future.

6. Compliance: means compliance with court decisions, laws and regulations. Bank could make a agreement with terms and conditions compliance with law to protect bank’s benefits. 我不确定这个部分，觉得没什么可写的。

Question 2: (chapter 8)

I will suggest Joe that asks Romano to prepare financial statements of last year which include balance sheet, income statement, and cash flow statement. Then calculate ratios from the financial statement include profitability ratio and liquidity ratio. Compare these ratios with prior years performance and industry average ratio. Tax liabilities that Romano owed to Australia tax office also can be found from the income tax statement.

I believe this useful financial information could support bank to make a correct decision.

[ 本帖最后由小田鼠佳佳于 2007-10-16 13:08 编辑 ]