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  • PPSA & Legislative Q's
     
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  • Financial Ratios and Related Tools

    A ratio by itself is an incomplete figure that could be misleading if analyzed in isolation. To perform an analysis, inter-related ratios should be examined and calculated over a period of time to see the trends, and then compared to ratios of industry or peers.

     
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  • International Financial Reporting Standards

    Effective January 1, 2011, IFRS will replace current Canadian GAAP accounting standards for Canadian publicly accountable enterprises (PAE) and Government Business Enterprises. As of this date as well, private companies have the option of adopting IFRS or the new Canadian standards developed specifically to meet their users' needs which are referred to as the Accounting Standards for Private Enterprises.

     
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  • Return on Equity Financial Expression

    Efficient use of assets is important for the profitability and growth of any organization. One of the easiest ways to gauge whether a company is an asset creator or cash user is to look at the return on equity (ROE) ratio. ROE is a strong measure of how well management is creating value for shareholders.

     
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  • Cash Flow Myths

    It's just too easy to mislead the average investor in Canada. Financial reports can be arcane and confusing even for professionals. Adding to the problem are regulators who don't care to clean up pervasive scams, much less make financial statements more usable for investors.

     
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  • International Credit

    Foreign trade differs from domestic trade with respect to the instruments and documents employed. Most domestic sales involve an open-account credit where the customer is billed and has so many days to pay. In international trade, the seller is seldom able to obtain as accurate or as thorough credit information on the potential buyer as with a domestic sale.

     
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  • PPSA Registrations - Is this the Weakness in Your Armour?

    As the saying goes, an ounce of prevention is worth a pound of cure. This expression is particularly apt when it comes to secured creditors and their registrations under the Ontario Personal Property Security Act (the "PPSA"). Although "getting it right the first time" has always been the mantra of secured creditors, the economic roller coaster ride of recent months has heightened the need to ensure a properly perfected secured claim.

     
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  • Floor Plans

    Go to any large auto dealer and there are hundreds of cars on the lot. You may wonder how much the dealer had to spend to provide you with almost limitless choices. What you don't realize is that, like most new car dealers, a floor plan was used to the cars. Simply, it is a way for...

     
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  • Construction Credit

    Construction credit is a unique and specialized form of mercantile credit. Although the field follows many of the same principles, practices and procedures as mercantile credit, there are a number of factors that make the practice unique. In order to be successful, the credit professional must...

     
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  • The Quickening of Innovation in Asset Based Financing

    Some would call it evolution: others, revolution. Semantic flourishes aside, financial technologies are increasingly in the foreground as drivers of product differentiation and proliferation in the asset-based financing industry.

     
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  • Lifting or Piercing The Corporate Veil
    If you always thought that incorporation generally protects shareholders and directors from personal liability when things go wrong, then this webinar is for you. Our webinar leader is Andrew Hladyshevsky, QC, LLB and a partner with the law firm, Fraser Milner Casgrain
     
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  • How a commercial lender will evaluate your creditworthiness for a loan

    When you apply for a commercial loan, lenders assess your credit risk based on a number of factors known as the “5 C’s of Credit.” Understanding these factors will help you build your personal and company credit standing while ensuring your ability to obtain credit when your business needs it most.

    Here is a breakdown to help you better understand these factors and what all lenders look for:

     
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  • Trade Credit Insurance

    Why Do Companies Buy Credit Risk Insurance? In this webinar you will learn how Credit Insurance: Mitigates Risk, Facilitates attractive bank financing, Offers Credit Enhancement, and Increase Sales.

     
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Q and A (1)
  • How does theoretical economics affect credit decisions?
    https://creditedu.org/knowledgecentre/index.php/site/qa/12
    1. As we have seen in the recessions of 1991 and 2001, marginal companies in many sectors will be forced to file for protection because of liquidity problems caused by them failing to meet their financing covenants, or the bank not renewing their line of credit, or credit becoming more expensive.  A failure of a major buyer can cause a company to break its covenants and be outside of its margining limit.
    2. With publicly traded companies, the problems may occur, but at least there is disclosure required if public companies are not meeting forecasts or they are outside of their banking covenants or they are having difficulty renewing their lines of credit.  Furthermore, often the debt of these companies is rated and the company’s fortunes are followed by industry analysts.

    By the time a credit manager gets the information, the company may already have a large exposure to the buyer.  As the situation deteriorates it may be difficult to bring the exposure down.  It is a question of timing, the poor results may not be reported for several months and during that period the exposure has been continuing to run.  The time between the disclosure of the problem and the reorganization may be very short as the buyer and secured creditors want to protect the assets.

    1. With private companies the problem is exacerbated, as it is difficult to even obtain financial information, let alone be advised in advance of developing problems.  Suppliers don’t know if sales are down, margins are being squeezed or there are problems with the bank.  If a credit manager can obtain Financial Statements, they provide a historical picture at best.  The effect of the recession is happening in real time, out of sight.

    In summary, credit managers work with very imperfect information.  Time works against them in obtaining information and they have to often make credit decisions projecting 3 to 6 months ahead.  A recession in the U.S. affects many buyers, but in most cases, the credit manager can only guess at how much the buyer is impacted.

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