Loan loss reserve as loan migrates down risk rating scale

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Reference no: EM131825270

1. Hailey, Inc. has sales of 19,580, costs of 9,450, depreciation expense of 2,120, and interest expense of 1,610. Assume the tax rate is 40 percent. What is the operating cash flow?

2. If I am given Profit Margin and Asset Turnover, how can I calculate for ROA?

3. Explain the impact on the loan loss reserve as a loan migrates down the risk rating scale. Pick a particular type of commercial loan and explain the required reserve percentage at each loan grade.

Reference no: EM131825270

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