Lending Decision
Lending Decisions Assignment
LOAN APPRAISAL REPORT
Title: AFW 3841 Assignment
By: Umasuthan Rengasamy (20365853)
To: Dr. Sockalingam
Faculty: School of Business and Economics
Date of Submission: 4 May 2012
TABLE OF CONTENTS 1. Introduction 2. Company Profile 3. The Financial Performance (3 years)
4. The Proposed Project
5. Capital & Financials
6. Capacity
7. Collateral
8. Conditions
9. Compliance Issues
10. Justification for the Loan
11. Loan Decision and Terms & Conditions
12. Conclusions
13. References * 1.0 Introduction
This report entails a loan structure for Air Asia Berhad, a low-cost airline service provider based in Malaysia (listed in the Bursa Malaysia) who aims to increase its annual sales by thirty percent and has approached the banking sector for a working capital loan of RM 10 million (tenure of five years). The bank would take its financial and non-financial standings into consideration and make an evaluation based on the five main credit evaluation criteria; mainly focusing on – capital, capacity, collateral, condition and compliance. The financial performance of the company over the past 3 years will also be assessed using audited financial statements. Moreover, both judgmental and financial ratio analysis approaches are applied to arrive at a conclusive decision. * 2.0 Company Profile
2.1 Name of Company
AIRASIA BERHAD
2.2 Date of Incorporation
December 20, 1993
2.3 Duration of Existence
Air Asia was established in 1993 and began operations on 18 November 1996, almost 19 years in existence
2.4 Objectives of the Company
Aims to be the largest low cost airline in Asia and serve the 3 billion people who are currently underserved with poor connectivity and high airfares. Aspires to attain the lowest cost so that everyone can fly with Air Asia. Maintain the highest quality product, embracing technology to reduce cost and enhance service levels.
2.5 The Business of the Company
LOAN APPRAISAL REPORT
Title: AFW 3841 Assignment
By: Umasuthan Rengasamy (20365853)
To: Dr. Sockalingam
Faculty: School of Business and Economics
Date of Submission: 4 May 2012
TABLE OF CONTENTS 1. Introduction 2. Company Profile 3. The Financial Performance (3 years)
4. The Proposed Project
5. Capital & Financials
6. Capacity
7. Collateral
8. Conditions
9. Compliance Issues
10. Justification for the Loan
11. Loan Decision and Terms & Conditions
12. Conclusions
13. References * 1.0 Introduction
This report entails a loan structure for Air Asia Berhad, a low-cost airline service provider based in Malaysia (listed in the Bursa Malaysia) who aims to increase its annual sales by thirty percent and has approached the banking sector for a working capital loan of RM 10 million (tenure of five years). The bank would take its financial and non-financial standings into consideration and make an evaluation based on the five main credit evaluation criteria; mainly focusing on – capital, capacity, collateral, condition and compliance. The financial performance of the company over the past 3 years will also be assessed using audited financial statements. Moreover, both judgmental and financial ratio analysis approaches are applied to arrive at a conclusive decision. * 2.0 Company Profile
2.1 Name of Company
AIRASIA BERHAD
2.2 Date of Incorporation
December 20, 1993
2.3 Duration of Existence
Air Asia was established in 1993 and began operations on 18 November 1996, almost 19 years in existence
2.4 Objectives of the Company
Aims to be the largest low cost airline in Asia and serve the 3 billion people who are currently underserved with poor connectivity and high airfares. Aspires to attain the lowest cost so that everyone can fly with Air Asia. Maintain the highest quality product, embracing technology to reduce cost and enhance service levels.
2.5 The Business of the Company
References: December 20, 1993 2.3 Duration of Existence Table 6: Air Asia Berhad Financial Performance Debt to equity ratio shows the proportion of amount borrowed the firm compared with the proprietor’s own investment in the business (Sathye, Bartle, Vincent & Boffey, 2003)