case wilson lumber
Nasirova Aynur
Global Finance
Case 1: Wilson Lumber
Credit analysis on Wilson Lumber as 31.12.1984
Net profit margin
Asset turnover
Financial leverage
RoE
RoA
0,0165
2,8851
2,6762
12,7%
4,75%
quick ratio current ratio debt to equity ratio debt ratio interest coverage ratio
0,6711
1,4519
1,68
0,63
2,61
The RoE of the company shows that it generated a 12,7 % profit on every dollar invested by shareholders in 1984. Taking into consideration that Wilson Lumber is a small company it can be considered average profitable. Ratios shows that company is not highly liquid, but such figures can be acceptable.
Company financed mostly by debtors and also uses its own resources. But difference between them is not high.
The company is capable to meeting its interest obligations from operating earnings.
Term Sheet
Borrower: Wilson Lumber Company
Lender: Northrup National Bank
Amount: $325,000
Interest Rate: Floating at one month Libor + 3%
Maturity: 90 day
Payments: Principal payments due at the earlier of (i) receipt of payment of any financed receivable or (ii) facility expiration date. Interest due monthly.
Guarantors: Roger Wilson
Covenants:
•Borrower promises to use the loaned funds for working capital
•Borrower promises to provide the lender with annual financial statements that are accurate and prepared in accordance with generally accepted accounting principles of a specified jurisdiction.
•Borrower agrees that representatives of the lender will be able to examine its property and records.
•Borrower promises to infoarm the bank of any event of default or other condition that will materially affect its ability to perform its loan obligations
•Borrower agrees to not establish any liens against its present or future property unless the borrower’s obligations to the bank is also be secured by that property.
•Borrower promises to pay any taxes assessed when due.
•Borrower promises to pay any taxes assessed when due.
•Borrower promises to sever his relationship with
Global Finance
Case 1: Wilson Lumber
Credit analysis on Wilson Lumber as 31.12.1984
Net profit margin
Asset turnover
Financial leverage
RoE
RoA
0,0165
2,8851
2,6762
12,7%
4,75%
quick ratio current ratio debt to equity ratio debt ratio interest coverage ratio
0,6711
1,4519
1,68
0,63
2,61
The RoE of the company shows that it generated a 12,7 % profit on every dollar invested by shareholders in 1984. Taking into consideration that Wilson Lumber is a small company it can be considered average profitable. Ratios shows that company is not highly liquid, but such figures can be acceptable.
Company financed mostly by debtors and also uses its own resources. But difference between them is not high.
The company is capable to meeting its interest obligations from operating earnings.
Term Sheet
Borrower: Wilson Lumber Company
Lender: Northrup National Bank
Amount: $325,000
Interest Rate: Floating at one month Libor + 3%
Maturity: 90 day
Payments: Principal payments due at the earlier of (i) receipt of payment of any financed receivable or (ii) facility expiration date. Interest due monthly.
Guarantors: Roger Wilson
Covenants:
•Borrower promises to use the loaned funds for working capital
•Borrower promises to provide the lender with annual financial statements that are accurate and prepared in accordance with generally accepted accounting principles of a specified jurisdiction.
•Borrower agrees that representatives of the lender will be able to examine its property and records.
•Borrower promises to infoarm the bank of any event of default or other condition that will materially affect its ability to perform its loan obligations
•Borrower agrees to not establish any liens against its present or future property unless the borrower’s obligations to the bank is also be secured by that property.
•Borrower promises to pay any taxes assessed when due.
•Borrower promises to pay any taxes assessed when due.
•Borrower promises to sever his relationship with