Executive Summary In the case GE Capital Canada, Clark Carriers submitted a request for a loan of $270000. It was confirmed first that Clark Carriers met the minimum requirements set out by the commercial equipment financing division of GE for loans. Cash flow was analyzed to ensure that Clark Carriers had sufficient cash flow from operations to make payments on current loans. The projected financial statements of 2003 were created and analyzed to include the new potential loan to display how the new equipment and contract would benefit Clark Carriers’ financial position. Then the financial ratios were analyzed to ensure that Clark Carriers was in fact efficient in its profitability, liquidity, stability, efficiency and growth in which
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Also with the increased debt that the loan will give Clark Carriers it has to make sure that this is an appropriate decision so that the debt will not increase and will have to owe for the rest of their time. The new safety regulations for trucking companies also pay a role, they need a certain amount of trucks and the space that they provide won’t meet the regulations so this loan is very important.
Analysis It does not look like it would be a stretch to approve the loan that Clark Carriers is asking for by looking at what they are asking for and how much it would cost the company will not lose much when giving the loan. It will actually be beneficial to the Commercial Equipment Department at GE because they will actually be making money. The company is not using accounts receivable as a use of cash so that it means that they are collecting their accounts, and it won’t reflect a poor management structure if the loan does get approved. They will also not have penalties, cancellations of credit and a decrease in reputation because of the fact that they are not using accounts receivable. The Clark Carriers company has been in good standing and their financial performance hasn’t had many real changes to it. The condition of the company over the short amount of time that they have been around has been good also. The profitability of Clark Carriers is pretty good