INSULAR BANK OF THE PHILIPPINES
INSULAR BANK OF THE PHILIPPINES
Case Analysis
Time Frame: 1981-1984
Perspective: Top Management:
Statement of the Problem:
Objectives:
Areas of Consideration:
Computation:
EXHIBIT 1
INSULAR BANK OF THE PHILIPPINES
Credit Rating Sheet of APEX Industries RATING FACTORS MAXIMUM POINTS COMPANY SCORE
I. Financial Performance 350
A. Profitability Ratios 100
1. Return on equity 35 28
2. Return on assets 30 24
3. Net income margin 20 16
4. Gross income margin 15 12
B. Liquidity Ratios 100
1. Net working capital 40
2. Current ratio 20
3. Acid test ratio 20
4. Strict liquidity test ratio 20
C. Leverage Ratios 100
1. Debt to equity 40 32
2. Debt service coverage 35 35
3. Current liabilities to net worth 25 10
D. Activity Ratios 50
1. Inventory turnover 20 8
2. Average collection period 20 20
3. Total asset turnover 10 10
Total 247
Multiply by: External x 90 %
Auditors Rating (%)
Net Financial Performance Score 222
II. Industry Background 250
A. Industry outlook 100 80
B. Company’s competitive strength
1. Sales as a percentage
Of industry sales in
Top 1000 60 60
2. Income growth relative
To industry 40 40
C. Government support for the industry 50 30
Industry Background Score 210
III. Company outlook 200
A. Projected leverage 80 80
B. Projected sales volume 60 60
C. Projected income generation 60 48
Company outlook score 188
IV. Company size 200
A. Size of net worth 120 48
B. Magnitude of net income 80 64
Company size score 112
Total Score 732
Multiply by: Qualitative Rating Factor x 100%
Net Score-All Factors 732
*Strict Liquidity Test Ratio =INSULAR BANK OF THE PHILIPPINES
Case Analysis
Time Frame: 1981-1984
Perspective: Top Management:
Statement of the
Case Analysis
Time Frame: 1981-1984
Perspective: Top Management:
Statement of the Problem:
Objectives:
Areas of Consideration:
Computation:
EXHIBIT 1
INSULAR BANK OF THE PHILIPPINES
Credit Rating Sheet of APEX Industries RATING FACTORS MAXIMUM POINTS COMPANY SCORE
I. Financial Performance 350
A. Profitability Ratios 100
1. Return on equity 35 28
2. Return on assets 30 24
3. Net income margin 20 16
4. Gross income margin 15 12
B. Liquidity Ratios 100
1. Net working capital 40
2. Current ratio 20
3. Acid test ratio 20
4. Strict liquidity test ratio 20
C. Leverage Ratios 100
1. Debt to equity 40 32
2. Debt service coverage 35 35
3. Current liabilities to net worth 25 10
D. Activity Ratios 50
1. Inventory turnover 20 8
2. Average collection period 20 20
3. Total asset turnover 10 10
Total 247
Multiply by: External x 90 %
Auditors Rating (%)
Net Financial Performance Score 222
II. Industry Background 250
A. Industry outlook 100 80
B. Company’s competitive strength
1. Sales as a percentage
Of industry sales in
Top 1000 60 60
2. Income growth relative
To industry 40 40
C. Government support for the industry 50 30
Industry Background Score 210
III. Company outlook 200
A. Projected leverage 80 80
B. Projected sales volume 60 60
C. Projected income generation 60 48
Company outlook score 188
IV. Company size 200
A. Size of net worth 120 48
B. Magnitude of net income 80 64
Company size score 112
Total Score 732
Multiply by: Qualitative Rating Factor x 100%
Net Score-All Factors 732
*Strict Liquidity Test Ratio =INSULAR BANK OF THE PHILIPPINES
Case Analysis
Time Frame: 1981-1984
Perspective: Top Management:
Statement of the