Business Capstone Reflection Paper

CASE STUDY: MR MARK ANGELO AND MARK EQUIPMENT PTY LTD

Marks: 100

ANSWER ALL THE QUESTIONS

Please study the attached case study information pertaining to Mr Mark Angelo and Mark Equipment (Pty) Ltd and answer the following questions:

Question 1

a) Calculate the gross income margin of Mark Equipment Pty Ltd for both years and provide reasons why you would include/ exclude certain figures provided in the income statement of Mark Equipment Pty Ltd in the calculation of this ratio.

15 marks

b) Did the financial position of Mark Equipment Pty Ltd improve or deteriorate during the past financial year. Use financial ratio analysis to substantiate your answer and provide a complete interpretation of the financial position of the company.

30 marks

Question 2

What credit products will you offer to:

a) Mr Angelo?

b) Mark Equipment Pty Ltd?

Please substantiate your answer.

20 marks

Question 3

Will you offer Mr Angelo an unsecured overdraft facility of $1500 000 in his own name in order to attract him as a client? Please substantiate your answer by only concentrating on credit assessment criteria.

20 marks

Question 4

List and assign realistic values to all the collateral that a banker can request from:

a) Mr Angelo

b) Mark Equipment Pty Ltd

20 marks

Question 5

Does Mark Equipment Pty Ltd have the ability to repay an additional loan of $ 10 million over a period of 10 years at 14,5% interest? Assume that the loan will be used to replace existing redundant equipment and will not necessarily lead to an increase in production capacity or sales....