Upgrade to remove ads
MGMT FIN INST CH 14
Terms in this set (25)
Firms may need cash for all of the following except:
liquidate fixed assets.
All of the following would be generally be considered acceptable commercial loan purposes except:
paying off other bank debts.
Which of the following is not one of the essential issues in evaluating commercial loan requests?
The structure of the borrower's board of directors.
Short-term working capital loans are generally repaid with funds from:
reductions in inventory and receivables.
Term loans are generally repaid with funds from:
cash flows from operations.
All of the following are basic sources of cash flows except:
Which of the following characteristics should collateral have?
b. The collateral claim must be legal and clear.
c. The lender must have a ready market for the collateral.
e. b. and c. only.
Why is liquidating collateral not a preferred means of loan repayment?
a. It deprives the borrower of the opportunity to salvage the company.
b. Transaction costs on liquidating collateral are often quite high.
c. Bankruptcy laws may prevent liquidation to occur in a timely manner.
d. All of the above
Which of the following is not part of the four-stage process for evaluating the financial aspects of commercial loans?
Examining the backgrounds of the sales force.
Common size financial statements convert figures to a common size by:
dividing balance sheet items by total assets and income statement items by net sales.
How efficiently a firm is using its assets is measured by:
A firm's mix of debt and equity is measured by:
A firm's ability to meet its short-term debt obligations is measured by:
Which financial ratio measures a firm's ability to pay current interest and lease payments with current earnings?
Fixed charge coverage ratio
Cash flows from a firm's normal business activities are reflected in:
cash flows from operations.
All of the following are sources of cash except:
a decrease in notes payable.
Which of the following is not a use of cash?
An increase in wages payable
The change in Net Fixed Assets equals:
capital expenditures minus depreciation.
At a minimum, cash flow from operations should cover:
dividends plus mandatory principal payments on debt.
Under which category are dividends classified on the statement of cash flows?
Cash From Financing Activities
Which of the following would cause a firm's ROE to be high, but its ROA to be low?
Financing a relatively large proportion of assets with debt.
A firm's borrowing base is:
an estimate of the available collateral on a company's current assets.
Many banks have changed their business model to a _____________ model.
In loan participations, the _____ makes the original loan and sells participations.
Which of the following is NOT a type of credit enhancement?
a. Excess cash flow
b. Credit derivatives
c. Loan guarantees
d. All of the above are a type of credit enhancements
YOU MIGHT ALSO LIKE...
Chapter 14: Evaluating Commercial Loan Requests an…
OTHER SETS BY THIS CREATOR
MGMT FIN INST CH 16
MGMT FIN INST CH 13
MGMT fin Inst. Ch 12
Quiz 2 Investments
OTHER QUIZLET SETS
Study : basics of learning
Microbiology Ch. 5