CLR
Showing 209–224 of 345 results
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Back to Basics – Putting Benford’s Law to work
April / May 2013
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 430
Abstract: It may seem intuitive that, in a list of numbers, the first digit will just as likely be one numeral as any other. But “Benford’s Law” shows that “1” appears nearly a third of the time, and each succeeding numeral has a progressively smaller frequency. This makes Benford’s law an useful tool for investigators to unearth fraud. This article explains how, and discusses a spreadsheet tool that makes it easy to put this technique into effect.
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How much is a business worth?
April / May 2013
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 654
Abstract: If a loan customer overextends itself by paying an inflated price for a business, there’s a good chance it will have a problem meeting its loan obligations. Rather than let that happen, an astute lender knows the importance of professional valuations and what goes into them. This article reviews some of the basics: the several meanings of value, the three approaches to valuing a business, and the importance of using a qualified appraiser.
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Financial checkups – “Wellness visits” pay off
April / May 2013
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 557
Abstract: Giving a borrower a routine checkup can help detect problems before distress symptoms appear on one’s year end financial statements. This article explains what to look for on a site visit and lists several warning signs of financial distress.
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Lean, mean borrowing machines – Encourage borrowers to cut the fat from working capital
April / May 2013
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 809
Abstract: Working capital — current assets minus current liabilities — is traditionally a measure of liquidity. High liquidity generally equates with low risk, but excessive amounts of cash tied up in working capital detract from other spending options, such as expanding to new markets, buying equipment and paying down debt. This article discusses five best practices for reducing working capital. A sidebar cites a study showing that top performers have significantly lower working capital on hand than do mediocre companies.
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Back to Basics — Smallest customers suffer biggest fraud losses
February / March 2013
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 465
Abstract: This issue’s “Back to Basics” cites a recent survey by the Association of Certified Fraud Examiners concerning the prevalence of fraud worldwide. The article notes how fraud damages small businesses in particular and offers suggestions for combating it.
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Use SWOT analysis as a due diligence framework
February / March 2013
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 890
Abstract: A strengths, weaknesses, opportunities and threats (SWOT) analysis is a proven management tool taught at business schools around the world. Strong borrowers will undertake and discuss the results with their lenders. But it’s important that lenders encourage weaker, less experienced borrowers to go through the exercise. This article shows how a SWOT analysis works and how it can help borrowers’ businesses. A sidebar offers a hypothetical example of SWOT discussions “in the field.”
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Approaching a roll-up carefully
February / March 2013
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 641
Abstract: In today’s painfully slow economic recovery, mergers and acquisitions continue to proliferate in the marketplace. Achieving economies of scale is the goal of most consolidations, including the roll-up. This article lists some of the benefits a roll-up can offer, but also notes potential drawbacks. It also discusses the need for careful preparation through formal business plans and careful due diligence.
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Making the mark — Grade borrowers with benchmarking data
February / March 2013
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 688
Abstract: Benchmarking is an insightful analytical tool. It involves comparisons between a company’s performance and industry norms or best practices. But not all borrowers engage in the benchmarking process, because they’re too bogged down with daily operations or unfamiliar with resources. Lenders can add value and protect themselves from financial distress by introducing borrowers to the process. This article offers a hypothetical example of how a lender can aid a borrower, and lists a variety of resources that offer benchmarking data.
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Back to Basics — Inventory method differences
Year End 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 488
Abstract: Inventory is one of a lender’s biggest sources of collateral. But there are significant differences in the ways borrowers report inventory. This article reviews the differences between two common inventory reporting methods: first-in, first-out (FIFO) and last-in, first-out (LIFO). Over time the choice becomes material, especially in an inflationary environment. If two customers use different inventory accounting methods, they might ultimately have the same bottom line but not both deserve the same credit line.
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Equity recaps may be the answer for some customers
Year End 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 678
Abstract: It may be impossible to extend a loan to every customer, but neither is it desirable to turn that client away without a solid suggestion for securing financing. Suggesting a private equity recapitalization is a possible solution. This article explains how an equity recap uses a private equity group (PEG) to provide financing, and what the group expects in return. The article offers a hypothetical example of the recap process.
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What you should know about divorce
Year End 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 950
Abstract: When divorcing spouses own a business, it can get ugly and expensive — and potentially put a loan at risk. Intracompany infidelity, customer attrition, employee turnover and shareholder buyouts are side effects that threaten financial performance. This article discusses some of the issues that can arise when one spouse controls the business, and how a buyout and a noncompete agreement may be necessary when both are in charge. But a sidebar looks at “collaborative divorce,” in which the couple decides to split up personally but maintain their professional relationships.
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How much is too much cash? — Mounting reserves aren’t always healthy
Year End 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 696
Abstract: According to a recent survey, more than a third of CFOs are stashing away more operating cash flow in their bank accounts than ever before. But this could be an inefficient use of capital that borrowers will regret down the road. This article discusses the cost of stockpiling too much cash and how formal financial forecasts can provide a method to building up cash reserves. It then looks at ways to reinvest a cash surplus.
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Back to Basics — Performance in a flash
October / November 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 530
Abstract: GAAP financial statements typically come out two to six weeks after month end. Management based solely on this stale information is reactive, not proactive. This article shows how flash reports bridge the timing gap between daily operations and receipt of GAAP financial statements. It explains what’s in a flash report and describes its uses and limitations.
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Bankers need to evaluate receivables with caution
October / November 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 559
Abstract: Some borrowers exaggerate their receivables to get a loan. Savvy bankers, however, know what to look for on the receivables end so that they don’t get duped. This article explains how to look out for fictitious sales, identify borrowers at risk, and look beyond the figures on financial statements.
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Who’s looking at impairment?
October / November 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 850
Abstract: When the Financial Accounting Standards Board relaxed its annual impairment testing requirements, some private firms mistakenly thought they were no longer required to test or report impairment. Not true. Impairment testing is alive and well. And many more borrowers could face impairment losses as the economy continues to limp along. This article describes the quantitative testing that’s required and the qualitative pretesting that’s allowed, and lists several factors to consider when deciding whether to formally test for impairment. A sidebar notes the impact of write-offs on financial statements.
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Going global — Tips on maneuvering the minefield
October / November 2012
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 822
Abstract: Does offshoring live up to all the hype? Before a borrower enters — or, in some cases, re-enters — the global realm, it’s important to consider ways to minimize risk and maximize results. This article discusses the pros and cons of offshoring and lists steps a company can take if that decision is made. It also looks at alternatives that may provide some of the benefits of offshoring while minimizing the drawbacks.