Student #/ Name: Assignment Title: Course Code: Section #: 998645701 (Yang Liu) Mountainerious Sporting Financial Management 1 2 3 4

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Mountainerious Sporting
Objective: Steven Donnie needs a loan to cover construction costs of store expansion/alternation. He also requested credit increase to fund stores seasonal needs for different type of inventories. Brad MacDougall, account manager at the Canadian Bank needs to determine whether to make loans and increase credit line to his long-term friend and client Steven. Key Issues: 1. Determining whether to fund the expansion. 2. Balancing between personal interests (friendship) and banking risk. 3. Analyzing the risk based on the financial statements. 4. Can the company maintaining its sustainable competitive advantage. 5. Determining how good its business model is. 6. Determining the risk for not getting the loan and/or line of credit increase. Methodology: 1. Analyze Brad MacDougalls personal interests and risk. 2. Assess the industry competitiveness and companys potential growth and market share. 3. Comparing the profitability (growth, asset turnover) with industry standards. 4. Analyze the business strategy from the ratios.
5. Calculate Bankruptcy possibilities with Altman Z-score and Beneish model.

6. Analyze the cash flows based on above assumptions. 7. Make adjustment to financial statements for retail business to make better estimates. 8. Develop a forecasting model with sensitivity analysis. 9. Analyze the intangibles and making adjustments Stevens career plan (retiring in 13 years), his wife ability to manage and their personal understanding and enthusiasm with the business.
10. Evaluate different alternatives. 11. Make a conclusion with recommendations.

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