Credit Evaluation School - June 2022

CLASSIFICATION Point out all the reasons for classification • Marginal or Insufficient collateral • Poor or weak financial condition • Lack of a repayment plan • Past due status • Others?

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CLASSIFICATION EXAMPLE – POOR OR WEAK FINANCIAL CONDITION ABC Corporation’s 12-31-x9 audited financial statements reflected TA of $1,200M, TL of $2,000M, and negative NW of $800M. Also reflected was GP of $2,000M, COGS of $1,000M, Operating Expenses of $1,200M, and Net Loss of $200M.

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Pge 10