Case, Sophisticated Petites

Case, Sophisticated Petites - • Size-up o External...

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Case: Sophisticated Petites Good website: o Financialtimes.com Moral hazard: o Banks get stake of the upside o No punishment on downside Issue: o Should bank grant Wong’s 3 rd store loan of $70K Criteria: o Maximize return while minimizing risk of default Alternatives: o “No” o “Yes – how much?/ type of loan/ collateral/ covenants/ rates or fees/ monitoring
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Unformatted text preview: • Size-up: o External: Economy Industry o Internal: Management of firm Operations Marketing Financial health • Method to forecast: • Key risks: o If we have to pay suppliers earlier (days A/P decreases), increase need for cash o If sales projections are too optimistic, higher bank loan...
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Case, Sophisticated Petites - • Size-up o External...

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