Credit Evaluation School eBook

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.

Classification • Clear & concise reasons for classification • Accurate • Include management's response including any commitments • If debt was classified at the previous exam, include the information - how classified & what amount