Data Analytics For Accounting
19th Edition
ISBN: 9781260375190
Author: RICHARDSON, Vernon J., Teeter, Ryan, Terrell, Katie
Publisher: Mcgraw-hill Education,
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Chapter 1, Problem 13DQ
To address the question “Will I receive a loan from LendingClub?” we had available data to assess the relationship among (1) the debt-to-income ratios and number of rejected loans, (2) the length of employment and number of rejected loans, and (3) the credit (or risk) score and number of rejected loans. What additional data would you recommend to further assess whether a loan would be offered? Why would it be helpful?
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Chapter 1 Solutions
Data Analytics For Accounting
Ch. 1 - Prob. 1MCQCh. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Prob. 4MCQCh. 1 - Prob. 5MCQCh. 1 - Prob. 6MCQCh. 1 - Prob. 7MCQCh. 1 - Prob. 8MCQCh. 1 - Prob. 9MCQCh. 1 - Prob. 10MCQ
Ch. 1 - Prob. 1DQCh. 1 - Give an example of how Data Analytics creates...Ch. 1 - Prob. 3DQCh. 1 - Prob. 4DQCh. 1 - Prob. 5DQCh. 1 - Prob. 6DQCh. 1 - Prob. 7DQCh. 1 - Prob. 8DQCh. 1 - Prob. 9DQCh. 1 - Prob. 10DQCh. 1 - Prob. 11DQCh. 1 - Prob. 12DQCh. 1 - To address the question Will I receive a loan from...Ch. 1 - Download and consider the data dictionary file...Ch. 1 - Download and consider the rejected loans dataset...Ch. 1 - Prob. 3PCh. 1 - Prob. 4PCh. 1 - Consider the 2013 declined loan data from...Ch. 1 - Consider the 2013 declined loan data from...
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- Based on the Cardinal Credit Financial Statement below, write a bulleted list analysis that includes: a) Do you think the main changes from year to year are good or bad and why do you think so?arrow_forwardWhat information can best be elicited from a receivable ratio? A. company performance with current debt collection B. credit extension effect on cash sales C. likelihood of future customer bankruptcy filings D. an increase in future credit sales to current customersarrow_forwardWhen a customer is delinquent on paying a notes receivable, your company has the option to continue to attempt collection or sell the debt to a collection agency. Research the benefits and challenges with each of these options and in a short essay, answer the following questions. A. What are the benefits and challenges of continuing to attempt collection yourself? B. What are the benefits and challenges of selling debt to a collection agency? C. If you had a dishonored notes receivable, which option would you select and why? D. Would you weight certain benefits or challenges differently when making your selection? How?arrow_forward
- A good credit rating would be based on all the following criteria EXCEPT whether you a. have a record of paying what you owe on time. b. have little or no current debt. c. use credit for regular expenses. d. can afford to take on more credit. e. have used credit appropriately in the past.arrow_forwardConsider the 2013 rejected loan data from LendingClub titled “DAA Chapter 1-2 Data”. To prepare the dataset for analysis, let’s scrub the risk score data. First, because our analysis requires risk scores, debt-to-income data, and employment length, we need to make sure each of them has valid data. Open the file in Excel. Sort the file based on risk score and remove those observations (the complete row or record) that have a missing score or a score of zero, if needed. Assign each risk score to a risk score bucket similar to the chapter. That is, classify the sample according to this breakdown into excellent, very good, good, fair, poor, and very bad credit according to their credit score noted in Exhibit 1-13. Classify those with a score greater than 850 as “Excellent.” Consider using nested if–then statements to complete this. Or sort by risk score and manually input into appropriate risk score buckets. Run a PivotTable analysis that shows the number of loans in each…arrow_forwardPlease help with the below minicase. Directions: The best way to do this case is to use relevant credit information and calculate some financial ratios: ROA, debt ratio, liquidity ratios, ROE, profit margin, Inventory and Asset turnover. Then look at breakeven point probability, and finally the possibility of a repeat order. What can you say about Miami Spice’s creditworthiness? What is the break-even probability of default? How is it affected by the delay before MS pays its bills? How should George Stamper’s decision be affected by the possibility of repeat orders? MiniCase: George Stamper a credit analyst with Micro-Encapsulators Corp. (MEC) needs to respond to an urgent email request from the southeast sales office. The local sales manager reported that she had an opportunity to clinch an order from Miami Spice (MS) for 50 encapulators at $10,000 each She added that she was particularly keen to secure this order since MS was likely to have a continuing need for 50 encapulators a…arrow_forward
- Please help with the below minicase. Directions: The best way to do this case is to use relevant credit information and calculate some financial ratios: ROA, debt ratio, liquidity ratios, ROE, profit margin, Inventory and Asset turnover. Then look at breakeven point probability, and finally the possibility of a repeat order. What can you say about Miami Spice’s creditworthiness? What is the break-even probability of default? How is it affected by the delay before MS pays its bills? How should George Stamper’s decision be affected by the possibility of repeat orders? MiniCase: George Stamper a credit analyst with Micro-Encapsulators Corp. (MEC) needs to respond to an urgent email request from the southeast sales office. The local sales manager reported that she had an opportunity to clinch an order from Miami Spice (MS) for 50 encapulators at $10,000 each She added that she was particularly keen to secure this order since MS was likely to have a continuing need for 50 encapulators a…arrow_forwardAnswer and explain Which of the following is NOT a reason why financial institutions complete annual reviews on a borrower? A. Annual reviews are best practice due diligence associated with monitoring a borrower’s loans B. Annual reviews allow lenders to assess and meet the changing needs of borrowers C. Annual reviews give borrowers a sense of key loan parameters such as the interest rate, time to maturity, and security D. Annual reviews help lenders to identify early warning signs, to mitigate credit risk, and to meet regulatory requirementsarrow_forwardWhich if the following is not true of the 5Cs in evaluating credit quality A Character refers to the integrity and honesty of the borrower and applies to both individuals and companies B Capital refers to the savings or wealth of the borrower as an additional source of income to repay the loan C Collateral refers to assets that are pledged to lender D Capacity refer to external factors including the state of economy that can impact the borrower’s source of income.arrow_forward
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