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Lending Decisions - Credit Paper

In: Business and Management

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AFF3841 ASSIGNMENT – LENDING DECISIONS

EXECUTIVE SUMMARY:

This analysis seeks to look at the organisation of Wridgways and determine whether Monash Bank should take over their debts, and incorporate them into the loan portfolio.

Wridgways is a removalist company that deals in the logistics and transport industry. They are the only listed removalist company in the world and have had vast growth since their breakaway from their previous parent company TNT. The company itself has been in existence since the 1892, and its management team appears dedicated and committed to succeed. Wridgways has recently attracted large companies for business relationships, such as Rio Tinto and Coles Myer. This will add to their corporate prestige and experience.

There are some issues outstanding that must be addressed with management before the loan takes place, such as the use of the funds and the reasons for undertaking expansion at a point where a more guarded policy should perhaps be taken in the light of global economic events. The company also has some publicity issues that could be rectified through a simple marketing plan – thus gaining many small, but important clients.

The analysis is broken down into 4 major components: 1. Introduction (pages 2-4) 2. Broad Business Analysis (pages 5-10) 3. Credit Risk Profile (pages 11-15) 4. Financial Statement Analysis and Comparison (pages 16-19)

Overall, Wridgways appears to be a very promising company with great potential for growth, given a more stable global market. Monash Bank will, by offering this loan, be able to conduct further financial operations with Wridgways, leading to a prosperous future for both institutions. It is the belief of this report that Monash Bank, given some extra negotiations with management to resolve outstanding issues, should undertake the loan for Wridgways.
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