Mark X Company a Executive Summary

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[Type the company name] | Mark X Company (A) | Financial Analysis and Forecasting | | labtech | [Pick the date] |

Analysis Analyzing Mark X Company’s financial statements and projecting the expected numbers for the coming years we make a decision on whether or not Mark X Company qualifies for the loan extension of $6,375,000.
The strength of Mark X as a company is its fixed assets turnover ratio, which rose from 1990 to 1992. This tells us Mark X 's ability to generate net sales from each addition of a fixed asset. Sales generated from the fixed assets are greater than the costs of the fixed assets, which imply that the fixed assets that were purchased are good investments for the company. This is really the only positive
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One of the major factors in the possible denial of the new loan is the lack of payments on their short term loans. Mark X could pay off their outstanding short-term loans by the end of 1993. The 1993 forecasted balance sheet shows a cash balance of $35,874 (all dollar values in thousands). Their current outstanding short term bank loans are projected to be $24,608. Assuming that the company can survive on a cash balance of $11,266, it would be possible for Mark X to pay off all the short term debt by the end of the year. There is a potential that the bank could withdraw its line of credit and demand immediate repayment of the two existing loans. If that happens, Mark X has very limited plans of action. If the bank were to demand immediate payment of all outstanding loans, Mark X would have a real mess on their hands. They would need to make payments of $18,233 for the short term debt and $9,563 for the long term debt. This means that Mark X would need to pay $27,796 within a period of 10 days. Their total ending cash at the end of the 1992 year is only $3,906 which would only be a small chunk of the outstanding loans. The company now would be forced to demand payment from their accounts receivables which are valued at $29,357 and would cover the total of the loan. However, they would need to collect the entire amount in under 10 days to pay the bank back. If they do not succeed in obtaining the $27,796, their only other option

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