FILE 1 OF 6 · THE FIRST QUESTION
A wine exporter's June balance sheet shows stock at a high and cash at a low. A colleague's draft paper says 'liquidity deteriorating'.
// THE IN-TRAY / CHAPTER 86 FILES · ONE MINUTE EACH
THE IN-TRAY · CHAPTER 8 OF HOW BANKERS THINK
6 files on The Three Translations
The question this chapter answers: Where do a sound business and a lending process most reliably fail to understand each other?
Make a call on any file and every option opens with how far it sits from the senior banker’s read. There is no score.
FILE 2 OF 6 · WHAT THEY HEAR
You tell a founder: 'We'd want the covenant package tightened before we extend.'
What does the founder hear?
FILE 3 OF 6 · THE CALL
A family manufacturer's accounts are thin: compiled by an accountant, no budget, no board. The owner has taken it through two recessions without missing a payment.
What is the paper missing?
FILE 4 OF 6 · WHAT THEY HEAR
The bank asks a farmer for quarterly accounts. She replies: 'My year has one harvest. Quarterly numbers will make me look broke three times a year.'
What is she telling you?
FILE 5 OF 6 · THE CALL
A long-standing client asks for a small US$300k equipment loan. Priced on its own, the margin barely covers your cost. The client also keeps US$4m on deposit and uses a trade finance line with the bank.
How do you price it?
FILE 6 OF 6 · WHAT THEY HEAR
A borrower says: 'You keep asking for management accounts. My business is in my head and on the phone with my suppliers.'
What do you hear?
6 FILES · PICK A CALL ON ANY OF THEM
// THE WHOLE TRAY
The placement draws three files from each of the eight chapters and ends in a card of where you read from.
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