For this assignment, you have a commercial loan case study to analyze and report on.
There are multiple parts to the project:
- Complete pro forma statements for the years 2015–2019, assuming an 8% growth rate for all line items. The cells that need to be completed are shaded in yellow.
- The management of Netflix has approached your bank about borrowing $50,000,000 in the form of a long-term bond. The bond would have a 30-year maturity and an 8% coupon rate. The first step is to calculate what the interest expense would be for this bond for Netflix on a monthly basis. Next, discuss what areas of the income statement and balance sheet would be impacted by this new debt and how. Finally, write a one-page recommendation to your credit committee regarding the approval of this loan.
- The management of Netflix has approached your bank about a line of credit. They are shopping for the largest line of credit and the best rate possible. Analyze the accounting statements and write a one-page recommendation to your credit committee that includes if you think you should approve a line of credit. If so, state how much, and a suggested interest rate. Explain your rationale and any assumptions you have made. Your summary should be at least 300 words.
- Lastly, prepare an 8- to 10-slide PowerPoint presentation summarizing your findings that you could use to present to the credit committee.