Question 1: Business Loan Case Study Awal Company is a large labor-intensive manufacturing company located in Arad Industrial Area, an industrial zone in Muharraq Governorate. Awal Company manufactures and sells disposable crockery, particularly cups, plates, forks, spoons, etc. made of plastic and polystyrene. About 70 percent of its workforce is foreign workers, with the majority comes from India and Bangladesh. The company established in 2000, has been profitable since its fourth year of operation. Currently. Awal Company serves the whole Bahrain. Although Awal Company supplies to wholesalers in large quantities, it also delivers directly to small operators, especially to canteens operating in factories located in Arad Industrial Area. Subsequent to its potential market expansion, the management of Awal Company has decided to seek a credit facility from your Bank. In the past, Awal Company had relied on a few suppliers to finance a large part of its needs for raw materials. However, due to some reasons, one of the main suppliers is in the process of winding-up (closing). Awal Company is considering seeking other alternative suppliers in China. Awal Company will select your bank to borrow in order to expand and buy plastic machines and equipment needed by their production line at least for next five years. The company's two most recent balance sheets were presented to you in support of their credit facility request. In addition, the company's income statement for the year just ended was provided to support the loan request. These statements are as follows: Awal Company Balance Sheet as at 31/12/13 and 31/12/14 Assets 2014 2013 Cash 8D 14,000 BD 15.000 Marketable Securities 6,200 6.000 Account Receivable 33,000 42.000 Inventory 84,000 51.000 Prepaid Rent 1,100 1,200 Total Current Assets BD 138,300 BD 115,200 Not Plant and Equipment 270,000 286,000 Total Assets BD 408,300 BD 401,200 13.000 Liabilities and Equity 2014 2013 Accounts Payable BD 57.000 BD 48.000 Notes Payable 15,000 Accruals 5,000 6.000 Total Current Liabilities BD 75,000 BD 69,000 Bonds 150,000 160,000 Total Liabilities 225,000 229,000 Ordinary Shares 100,000 100.000 Retained Earnings 83.300 72.200 Total Equity BD 183,300 BD 172.200 Total Liabilities & Equity BD 408,300 BD 401,200 Question 1: Business Loan Case Study Awal Company is a large labor-intensive manufacturing company located in Arad Industrial Area, an industrial zone in Muharraq Governorate. Awal Company manufactures and sells disposable crockery, particularly cups, plates, forks, spoons, etc. made of plastic and polystyrene. About 70 percent of its workforce is foreign workers, with the majority comes from India and Bangladesh. The company established in 2000, has been profitable since its fourth year of operation. Currently. Awal Company serves the whole Bahrain. Although Awal Company supplies to wholesalers in large quantities, it also delivers directly to small operators, especially to canteens operating in factories located in Arad Industrial Area. Subsequent to its potential market expansion, the management of Awal Company has decided to seek a credit facility from your Bank. In the past, Awal Company had relied on a few suppliers to finance a large part of its needs for raw materials. However, due to some reasons, one of the main suppliers is in the process of winding-up (closing). Awal Company is considering seeking other alternative suppliers in China. Awal Company will select your bank to borrow in order to expand and buy plastic machines and equipment needed by their production line at least for next five years. The company's two most recent balance sheets were presented to you in support of their credit facility request. In addition, the company's income statement for the year just ended was provided to support the loan request. These statements are as follows: Awal Company Balance Sheet as at 31/12/13 and 31/12/14 Assets 2014 2013 Cash 8D 14,000 BD 15.000 Marketable Securities 6,200 6.000 Account Receivable 33,000 42.000 Inventory 84,000 51.000 Prepaid Rent 1,100 1,200 Total Current Assets BD 138,300 BD 115,200 Not Plant and Equipment 270,000 286,000 Total Assets BD 408,300 BD 401,200 13.000 Liabilities and Equity 2014 2013 Accounts Payable BD 57.000 BD 48.000 Notes Payable 15,000 Accruals 5,000 6.000 Total Current Liabilities BD 75,000 BD 69,000 Bonds 150,000 160,000 Total Liabilities 225,000 229,000 Ordinary Shares 100,000 100.000 Retained Earnings 83.300 72.200 Total Equity BD 183,300 BD 172.200 Total Liabilities & Equity BD 408,300 BD 401,200