Banking
Showing 417–432 of 600 results
-
Tools of the trade — 3 ratios to help you size up borrowers
June / July 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 647
Abstract: Financial ratios can be an excellent tool for pinpointing businesses that deserve credit. One popular ratio, return on equity, or ROE, shows how much a company earns for each dollar its owners have invested. But lenders who conduct DuPont analyses gain additional insight by expanding this classic measurement into three underlying components: profit margin, total asset turnover ratio, and a comparison of total assets to equity. This article shows how, even with their limitations, ratios can be a highly useful analytical tool.
-
The optimal capital structure — The right blend of debt and equity is key
June / July 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 696
Abstract: Private business owners are often gun-shy when it comes to taking on debt, as it adds risk to the business. But a reasonable level of debt enables borrowers to grow faster and build value for equity investors. This article points out the advantages of limited debt and explains how a select blend of debt and equity can maximize a company’s value.
-
Handling mixed accounting methods before “little GAAP”
June / July 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 963
Abstract: Lenders must deal with a mishmash of accounting standards when reviewing borrowers’ financial statements. Some companies follow Generally Accepted Accounting Principles (GAAP), and some use tax or cash basis methods. Others adopt International Financial Reporting Standards for small and medium entities, or they use other comprehensive bases of accounting. This inconsistency creates due diligence headaches. This article discusses the pace of progress toward establishing a simpler form of GAAP — “little GAAP” — for smaller companies, while a sidebar lists specific areas where GAAP is problematic.
-
Interim reports have pluses, minuses – and limitations
April / May 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 611
Abstract: Businesses generally release annual financial statements to let interested parties, including lenders, evaluate their financial health. But proactive lenders should want more than one “snapshot” per year of their borrowers’ financial well-being. This article looks at how interim financial reports can be invaluable in revealing changes in the borrowers’ stability, but also shows that these reports have certain drawbacks and limitations.
-
Back to Basics — What if …?
April / May 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 457
Abstract: Financial statements show how a company has performed in the past. But historic data doesn’t necessarily predict future performance, especially in an uncertain, volatile market. Projections and forecasts better gauge default risk, but this article shows how lenders can take the process one step further through scenario and sensitivity analyses.
-
Taking a backdoor approach to due diligence
April / May 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 778
Abstract: Lenders who understand the details underlying business operations are better able to minimize risk — and maximize return. This article shows how to think beyond financial statements and tax returns, and look for skeletons in the closet — and hidden opportunities. It explains the importance of determining whether the company has key people who are there for reasons of competence rather than nepotism and that it has annual insurance reviews to ensure adequate coverage.
-
Ready, set, restructure
April / May 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 861
Abstract: Missed payments, maxed out credit lines, management turnover and unreturned phone calls are just a few of the precursors that indicate it’s time to recommend a restructuring specialist to assist the distressed borrower. This article explains how a specialist can identify costs that can be cut and noncore assets that can be liquidated. It also explains why forgiving or restructuring debt might be advisable. A sidebar discusses ways a restructuring specialist can recommend creative alternatives to improve cash management.
-
BANK Wire – OCC provides foreclosure guidance
Spring 2012
Newsletter: Community Banking Advisor
Price: $225.00, Subscriber Price: $157.50
Word count: 426
Abstract: This issue’s “BANK Wire” discusses recent foreclosure guidance offered by the Office of the Comptroller of the Currency; the FDIC’s increased scrutiny of bank insurance policies; FAQs on interest rate risk management that have been jointly adopted by the various federal banking agencies; and the Consumer Financial Protection Bureau’s prototype monthly mortgage statement that is being offered for comments.
-
Sorting through restatements – Sometimes financial restatements simply correct mistakes
Spring 2012
Newsletter: Community Banking Advisor
Price: $225.00, Subscriber Price: $157.50
Word count: 550
Abstract: Mistakes on borrowers’ financial statements, requiring financial restatement, can happen. But financial restatements can also be a red flag for fraud or misrepresentation. It’s a challenge for any lender to determine which is which. This article uses a hypothetical situation describing a company that innocently made mistakes, resulting in a costly restatement before it was able to successfully complete a public offering. The article also describes some of the leading causes of financial restatements.
-
Understand the tax implications of bank mergers
Spring 2012
Newsletter: Community Banking Advisor
Price: $225.00, Subscriber Price: $157.50
Word count: 623
Abstract: Institutions contemplating a merger need to consider a variety of tax issues. Two key issues today are: the dividend vs. capital gain treatment of cash payments in a tax-free merger, and the preservation of deferred tax assets. It’s also important to conduct thorough due diligence to uncover any tax liabilities that might be inherited from the target bank. This article takes a look at each of these matters.
-
Suspicious activity: Are you seeing the big picture?
Spring 2012
Newsletter: Community Banking Advisor
Price: $225.00, Subscriber Price: $157.50
Word count: 856
Abstract: Monitoring customer transactions for suspicious activity is a key component of a financial institution’s Bank Secrecy Act / Anti-Money Laundering (BSA/AML) program. Unfortunately, many banks make the mistake of focusing their efforts on deposit accounts and paying less attention to other products and services, particularly lending. This article shows how, after conducting a risk assessment, a bank can design a BSA/AML compliance program that fits its risk profile, and then implement risk-based due diligence procedures to minimize lending-related BSA/AML risks. A sidebar lists several borrower red flags that may raise bank suspicions.
-
Back to Basics — Zero in on concentration risks
February / March 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 489
Abstract: Too much reliance on one customer or supplier can be dangerous. This article shows how to identify risky accounts not only by asking borrowers to provide a list of major customers and suppliers, but by checking external sources as well. It also explains why it’s helpful for borrowers to analyze the gross and operating margins for all major customers.
-
How to tackle poor cash flow
February / March 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 699
Abstract: If a small-business customer is constantly losing the battle against cash going out vs. cash coming in, what can its lender do? The answer lies in the lender’s familiarizing the customer with the concept of a cash flow gap and showing how to narrow it. This article explains how to calculate a cash gap, and how companies can reduce it by keeping inventory lean and improving collection procedures.
-
Making out-of-step borrowers look normal
February / March 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 896
Abstract: No two businesses look exactly alike, but lenders often compare borrowers in the same industry to one another or themselves over time to get a better understanding of a borrower’s past and future earning power. Such comparisons require “normalizing” reconciliations to the income statement and balance sheet. This article offers a summary of the most common categories of financial statement reconciliations that lenders encounter, including different accounting practices, one-time charges and collateral. A sidebar explains how to scrutinize a borrower’s discretionary expenses.
-
Easy to steal, hard to reveal — Why inventory is a prime fraud target
February / March 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 674
Abstract: Most borrowers pledge inventory as loan collateral. But it’s also a popular place for the unscrupulous to hide embezzlement. This article explains what makes inventory fraud so appealing and the methods fraudsters use to pull it off. It also explains how lenders can be important watchdogs in the battle against fraud.
-
BANK Wire – FAF: No independent board for “private company GAAP”
Winter 2012
Newsletter: Community Banking Advisor
Price: $225.00, Subscriber Price: $157.50
Word count: 413
Abstract: This issue’s “BANK Wire” discusses the Financial Accounting Foundation’s rejection of the concept of a separate accounting standards board for private companies, in favor of a Private Company Standards Improvement Council. It also looks at the revelation of widespread mortgage-related violations of the Servicemembers Civil Relief Act, and notes a Federal Trade Commission publication that provides a valuable guide to anyone dealing with Fair Credit Reporting Act issues.