You have been short listed by Bank of Abraham for an interview to work as a senior credit analyst in their head office in New York
City. You are very excited at this opportunity not only because it offers you an opportunity to further utilize your skills in
financial analysis but also because the bank is offering you very attractive fringe benefits including an all-expenses paid
vacation to a destination of your choice once a year (you can also bring along a friend or family member).
Prior to the interview, the panel has asked you to produce a report, recommending whether to provide a loan to a Small-cap company
of your choice listed on the New York Stock Exchange. The company is seeking a loan of 10% of its latest revenue figure to finance
a new overseas venture. Refer to the last available 10-K for the latest revenue figure. You have also been provided a link to a
website that provides a list of companies by Exchange Listing, Region and Market Cap. Choose NYSE, North America and Small Cap
(Links to an external site.)Links to an external site.. (The link is
Knowing that you are registered in the Financial Statement Analysis Course, the panel has also reminded you to consult “Chapter 5:
Risk Analysis” from your main text book reading.
Wahlen, J. M., Baginski, S. P., & Bradshaw, M. (2017). Financial reporting, financial statement analysis and valuation. (9th ed.).
Your task is to produce a Credit Analysis Report (with a maximum word count of 2,000 words- tables/graphs not including)
recommending whether to provide the loan. You have been reminded that, the panelists are all busy professionals and are not
interested in seeing a very long report; therefore you will need to keep to the word limit. The panel has also requested that you
focus on analyzing the issues rather than on purely describing information based on the following two sections.
Section A: Criteria
• Company Overview & Firm-Specific Risks (max 400 words)
• Short-Term Liquidity Risk (max 500 words) [20 grade points]
• Long-Term Solvency Risk (max 500 words) [20 grade points]
• Based on the above three criteria, your recommendation on whether to provide the loan or not (max 300 words) [20 grade points]
Section B: Other
The task required you to provide a recommendation on whether to provide a loan or not based on three categories of information. In
the final section, you are to elaborate on the limitations of the above analysis, including what further sources of information you
would like to utilize to make a more informed decision (300 words max). [20 grade points]
Total grade points: 100