OUTLINE: Scenario Analysis in Finance
The attached paper entails the following components:
Evaluating a manufacturing company before making an acquisition is a necessary
process. The companies having strong financial performance based on the parameters
highlighted will be selected.
Credit rate/score is an evaluation of creditworthiness, used for businesses or individual
consumers. It helps lenders to anticipate how likely one is to repay your loan on time and
assess the risk that one won't be able to repay the debt as agreed (Boshkoska, 2017).
Loan approval is easier to obtain for short term loans. The short term lenders may lack
stringent background checks compared to long term loans. Since the acquisition is sudden
and more tranquil approval is required, the company should opt for the short term loan
The inflation will have an impact on the investors and the acquiring company since it
chips away from the investment returns and real savings
In general, the yield curve and the term structure of interest rate are the same and
sometimes used interchangeably. This is because the graphs of term structure interest are
plotted on the same plots with different yields being offered by bonds having different
The technological impact on the non-banking sector will exert upward pressure on the
interest rates. However, fancy technology such as those in the banking sector will exert
downward pressure on interest rates. If a new process is developed that allowed
automobiles to run off oil-based lemonade, the demand for oil will reduce, and the
interest rate will increase
Ratios are important when making various comparisons between various aspects of a
company to assess its performance or how the company compares to other companies in
the industry or region. The ratios will reveal whether the company h...
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