Business Administration 1220E Lecture Notes - Lecture 12: The Home Depot, Retained Earnings, Financial Statement

• School: Western University
• Department: Business Administration
• Course: Business Administration 1220E
• Professor: Trina Ruthes

Document Summary

Business 1220e- lecture 12- sensitivity analysis and the 4cs of credit and decisions (maple leaf hardware ltd. case study part b) The three accounts that should be considered when performing sensitivity analysis are: days accounts receivable, days account payable, days inventory. Choose the one account that is the most vulnerable to change based on the case being analyzed. Determine what would happen if the average number of days increases or decreases from projections and recalculate the dollar value for the account for two years. Asses the overall impact that increase and decrease in average days have on the plug. Credit enables a company or organization to purchase goods or services in the present and pay for them in the future. The 4 c"s include: conditions of the business, character, capacity to repay, collateral. Use pest analysis to assess how the company has performed in its industry: political, economic, social, technological. Not all may apply to the case at hand.