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AutoSave OFF vc 1: Corp Credit Analysis Hardware Hawaii Question.xltx - Compatibility Me Home Insert Draw Page Layout Formulas Data Review View Tell me Arial V 10 V A? ab ce Wrap Text v General Paste B I U v V V . V Merge & Center v $ v % 9 60 .00 100 0 Conditional Formatting D23 x fx A B D E LL G . I J K L M N 1 Hawaii Mill Hardware (in US$ Millions) Corporate Credit Analysis 2 3 Ratios for 2020 4 2019 60 50 Approximate Rating 56% BB ST Debt LT Debt 2020 60 30 Debt / (Debt + Equity) LOON FCF / Debt Common Stock Retained Earnings 20 55 25 45 8 FFO/Debt EBIT / Average Capital EBIT / Interest Expense Interest Expense Tax Expense Net Income Depreciation Exp CF from WC changes CF from Capex Cash on B/S 6 3 10 15 -10 -10 20 5 -1 -1 15 20 -5 25 Debt/EBITDA Notes 1) Company has been in business over 100 years 2) 2020 is only the 4th time the company lost money. 3) Company has been a very good customer of the bank for 50 years. You are their main bank 4) Your bank currently has $15 million of credit risk exposure to Hawaii Mill. Total Debt Total Equity Total Capital Average Capital 110 75 185 90 70 160 172.5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Questions 1) What is your LT debt rating for Hawaii Mill? FFO CF Ops FCF EBIT EBITDA 2) In addition to the above ratios, what other factors (pros and cons) would you incorporate into your analysis of Hawaii Mill's credit strength? (factors can be financial, market, econ, etc) 3) Assume you are under the current Coronavirus situation, Hawaii Mill is asking for a 5 year loan for $10 million to shore up its finances. Would you make the loan and why? If so, what interest rate would you charge? What conditions (covenants) would you add to the loan agreement? What additional information would you like to see? Hardware S&P Ratios + B D F L m o H G 1 K M N Ratios for 2020 2019 60 50 2020 60 30 Approximate Rating 56% B8 ST Debt LT Debt Debt / (Debt + Equity) FCF / Deb? Common Stock Retained Earnings 20 55 25 45 FFO/Debt EBIT / Avelage Capital EBIT / Interest Expense 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Interest Expense Tax Expense Net Income Depreciation Exp CF from WC changes CF from Capex Cash on B/S 6 3 10 15 -10 -10 20 5 - 1 -1 15 20 -5 25 Debt EBITDA Notes 1) Company has been in business over 100 years 2) 2020 is only the 4th time the company lost money. 3) Company has been a very good customer of the bank for 50 years. You are their main bank 4) Your bank currently has $15 million of credit risk exposure to Hawall Mill Total Debt Total Equity Total Capital Average Capital 110 75 185 90 70 160 172.5 19 15 FFO CF Ops FCF EBIT EBITDA Questions 1) What is your LT debt rating for Hawaii Mil? 2) In addition to the above ration, what other factors (pros and cone) would you incorporato into you analysis of Hawaii Mill's credit strength (factors can be financial market, econ, etc) 3) Assume you are under the current Coronavirus situation. Hawell Mill is asking for a 5 year foon for $10 milion to store up its finances 24 25 20 27 28 29 30 31 32 33 Would you make the loan and why? W so, what interest rate would you charge? What conditions covenants) would you add to the loan agreement? What additional information would you like to see? AutoSave OFF vc 1: Corp Credit Analysis Hardware Hawaii Question.xltx - Compatibility Me Home Insert Draw Page Layout Formulas Data Review View Tell me Arial V 10 V A? ab ce Wrap Text v General Paste B I U v V V . V Merge & Center v $ v % 9 60 .00 100 0 Conditional Formatting D23 x fx A B D E LL G . I J K L M N 1 Hawaii Mill Hardware (in US$ Millions) Corporate Credit Analysis 2 3 Ratios for 2020 4 2019 60 50 Approximate Rating 56% BB ST Debt LT Debt 2020 60 30 Debt / (Debt + Equity) LOON FCF / Debt Common Stock Retained Earnings 20 55 25 45 8 FFO/Debt EBIT / Average Capital EBIT / Interest Expense Interest Expense Tax Expense Net Income Depreciation Exp CF from WC changes CF from Capex Cash on B/S 6 3 10 15 -10 -10 20 5 -1 -1 15 20 -5 25 Debt/EBITDA Notes 1) Company has been in business over 100 years 2) 2020 is only the 4th time the company lost money. 3) Company has been a very good customer of the bank for 50 years. You are their main bank 4) Your bank currently has $15 million of credit risk exposure to Hawaii Mill. Total Debt Total Equity Total Capital Average Capital 110 75 185 90 70 160 172.5 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Questions 1) What is your LT debt rating for Hawaii Mill? FFO CF Ops FCF EBIT EBITDA 2) In addition to the above ratios, what other factors (pros and cons) would you incorporate into your analysis of Hawaii Mill's credit strength? (factors can be financial, market, econ, etc) 3) Assume you are under the current Coronavirus situation, Hawaii Mill is asking for a 5 year loan for $10 million to shore up its finances. Would you make the loan and why? If so, what interest rate would you charge? What conditions (covenants) would you add to the loan agreement? What additional information would you like to see? Hardware S&P Ratios + B D F L m o H G 1 K M N Ratios for 2020 2019 60 50 2020 60 30 Approximate Rating 56% B8 ST Debt LT Debt Debt / (Debt + Equity) FCF / Deb? Common Stock Retained Earnings 20 55 25 45 FFO/Debt EBIT / Avelage Capital EBIT / Interest Expense 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Interest Expense Tax Expense Net Income Depreciation Exp CF from WC changes CF from Capex Cash on B/S 6 3 10 15 -10 -10 20 5 - 1 -1 15 20 -5 25 Debt EBITDA Notes 1) Company has been in business over 100 years 2) 2020 is only the 4th time the company lost money. 3) Company has been a very good customer of the bank for 50 years. You are their main bank 4) Your bank currently has $15 million of credit risk exposure to Hawall Mill Total Debt Total Equity Total Capital Average Capital 110 75 185 90 70 160 172.5 19 15 FFO CF Ops FCF EBIT EBITDA Questions 1) What is your LT debt rating for Hawaii Mil? 2) In addition to the above ration, what other factors (pros and cone) would you incorporato into you analysis of Hawaii Mill's credit strength (factors can be financial market, econ, etc) 3) Assume you are under the current Coronavirus situation. Hawell Mill is asking for a 5 year foon for $10 milion to store up its finances 24 25 20 27 28 29 30 31 32 33 Would you make the loan and why? W so, what interest rate would you charge? What conditions covenants) would you add to the loan agreement? What additional information would you like to see