Identify the financial ratios

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1. As a lending agency, what criteria using the 3 c's of lending would you use to determine how much to grant, to whom, and under what conditions? Also give an example as to whom to lend to, how much to grant, and under what conditions.

2. As part of your response to 1 above, where applicable under the respective and/or select criteria, please identify the financial ratio(s) that are critical for supporting lending decisions (see Commonly Used Ratios list (Spiro, 1996:60 (Table 4).

Please provide a detailed rationale(s) for why the selected ratio(s) identified are important. We must use the 3c''s of lending as well.

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The task pertains to the writing about three C's of the lending arrangement. The example has been quoted in the 1st part to analyse the three C's and their suitability in order to lend to the borrower who is not the defaulter. Further, the financial ratios of the borrower do reflect the three C's. The financial ratios can therefore be helpful to prove that the borrower should be given the loan or not. The financial ratio is the indication of the purpose of the lending arrangement. these all have been explained in the solution as per the requirement ofthe question.

Reference no: EM131738717

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inf1738717

4/12/2018 5:59:35 AM

The Expert who worked on this task was very responsive and gave me the project before the time scheduled with them. I only had to make minor changes. Great job thank you almost did to much but I am sure more is better. Thank you

inf1738717

12/19/2017 5:53:22 AM

Example for reference: There are two borrowers in front of lender : individual person who is trader of readymade garments and the company dealing in construction services. Although prima facie, one may assume that company will be able to repay and should be given the loan. However, after studying the historical background, it was reflected by lender that company is short of character as well as collateral. So, the eligible borrower in this case should be the individual Also provide an example in the solution as to whom to lend to, how much to grant, and under what conditions". Thanks.

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