Trinance is an online trading platform offering trading services to investors in cryptocurrencies. The company started off as a small private company and has grown strongly over the past fifteen years and listed on Hong kong Stock Exchange. The company has businesses in many offshore locations including Dubai, all of which are well-developed capital markets. In some parts of the world, the company has near-monopoly markets. As part of its strategy, the company uses acquisitions rather than growth to continue to expand the business. While the business is software based, it relies on continued activity in the financial markets. The company has had the same management over the past fifteen years and the senior management team are shareholders in the company. The company is rated BBB and its bonds are trading at 3.3 per cent above the comparable government bond rate (5%). The industry of cryptocurrency trading was flourishing during the last 5 years, however, predictions about it future are not promising since central banks around the world are working on issuing digital currencies that would compete with cryptocurrencies. Moreover, there no consensus among business to accept cryptocurrencies as payment medium. The condensed financial accounts are as follows: Net profit is $1,560,000 on sales of $742,613,000 and Cost of goods sold equal $642,700,000. The number of shares is 1,000,000 and the share price is equal to $200. The firm is requesting a loan of $150 million to assist further acquisitions. The firm has no guarantee to offer against the loan. Ratio industry averages: - Current ratio =3 Page 2 of 4 - Inventory turnover ratio =6 - Net profit to sales ratio =0.15 - Debt to Equity ratio =0.4 Questions: 1- Carry out a credit risk analysis on an expert basis (5Cs). 2- Having carried out the above analysis, what would be your final decision? Justify your decision. Trinance is an online trading platform offering trading services to investors in cryptocurrencies. The company started off as a small private company and has grown strongly over the past fifteen years and listed on Hong kong Stock Exchange. The company has businesses in many offshore locations including Dubai, all of which are well-developed capital markets. In some parts of the world, the company has near-monopoly markets. As part of its strategy, the company uses acquisitions rather than growth to continue to expand the business. While the business is software based, it relies on continued activity in the financial markets. The company has had the same management over the past fifteen years and the senior management team are shareholders in the company. The company is rated BBB and its bonds are trading at 3.3 per cent above the comparable government bond rate (5%). The industry of cryptocurrency trading was flourishing during the last 5 years, however, predictions about it future are not promising since central banks around the world are working on issuing digital currencies that would compete with cryptocurrencies. Moreover, there no consensus among business to accept cryptocurrencies as payment medium. The condensed financial accounts are as follows: Net profit is $1,560,000 on sales of $742,613,000 and Cost of goods sold equal $642,700,000. The number of shares is 1,000,000 and the share price is equal to $200. The firm is requesting a loan of $150 million to assist further acquisitions. The firm has no guarantee to offer against the loan. Ratio industry averages: - Current ratio =3 Page 2 of 4 - Inventory turnover ratio =6 - Net profit to sales ratio =0.15 - Debt to Equity ratio =0.4 Questions: 1- Carry out a credit risk analysis on an expert basis (5Cs). 2- Having carried out the above analysis, what would be your final decision? Justify your decision