ON THE DESKFREE EDITORIAL · COMPOSITE TEACHING CASES
On the desk.
You're on a lending desk, first book or fifteenth year, and want your read against a senior's.
8 CASES · 3 TOOLS · 10 GUIDES
ISSUE 08 · PROPERTY · NEW-TO-BANK · +2 CHAIRS
Basalt Ridge Developments
A new-to-bank developer, a claimed 28% ROE and two other banks circling. Your bank has a growth target.
3/5 · 6 MINRead drill
THE CASES
THE CRAFT
- Cash Flow Analysis A lender reads cash before profit, because profit is the output of judgment calls and operating cash flow is largely mechanical: what came in from customers, what went out to suppliers, staff and the tax office.
- Working Capital Case Study A working capital case study asks one question of a working capital request: is it funding growth, or funding a deterioration?
- Cash Conversion Cycle The cash conversion cycle is debtor days plus inventory days minus payables days: the number of days a business must fund between paying its suppliers and being paid by its customers.
- Temporary or Permanent Working Capital A working capital need is temporary when the borrowing comes back as the cycle turns, and permanent when a core balance never clears.
- Testing Borrower Forecasts The first test is not applied to this forecast but to the last one: what the same management projected two years ago against what arrived, because accuracy is a property of the forecaster before it is a property of the spreadsheet.
- Management Quality Management quality sounds like a judgment about people and is read as a record.
- Portfolio Manager vs RM In commercial banking a portfolio manager is a credit role, not an investment one.
- RM Scorecard A commercial banking relationship manager is evaluated on a scorecard that mixes what they bring in with what it turns into.
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