留學生投資學dissertation

借款人B部分的概述
 

公司的歷史
 

1984年11月, 現金流通國際有限公司(CCV) 的創始人兼前主席布萊恩?庫明, 在西澳大利亞州的珀斯,開始了他的第一個零售店業務。營銷準則和交易風格在未來的四年里得到了發展，并且市場上的測試奠定了集團的成功。1988年6月, 他在珀斯開了兩家特許經營店。1990年,該集團開始在澳大利亞的其他州擴大其業務，目前在澳大利亞有超過100家店面。由于澳大利亞經營業務的成功,CCV的目標開始擴展到國外市場。歐洲是公司進入的第一個區域。開在英國的第一家店是在1991年。今天,在英國有超過100家門店,并且這個公司成長的非?？?在21個國家有500家的特許經營網。
 

借貸現狀
 

CCV 根據租購協議及租賃合同，只是在業務上持有它的借款。在 2008 年和 2009 年，包括當前和以前的借款，借款總額分別為 AUD1223 萬元和 AUD1692 萬元 (現金流通國際有限 2009年年度報告）。

 

SECTION B OVERVIEW OF THE BORROWER

 

History of the company

 

In November 1984, Brian Cumins, the founder and former Chairman of Cash Converters International Limited (CCV), started his first retail outlet business in Perth, Western Australia. The merchandising formula and trading style were developed in the next four years and tested in the marketplace that has underwritten the group's success. In June 1988, two franchised outlets were opened in Perth. In 1990, the group started to enlarge its business into other Australian States which now has over 100 outlets in Australia. Due to the successful of its Australian operations, CCV aimed to expand into foreign markets. Europe was the first region which the Company entered. The first store was opened in the United Kingdom in year 1991. Today, there are over 100 stores in UK and the company has grown tremendously by having a network of 500 franchised over 21 countries.

 

Current borrowing status

 

CCV holds its borrowings merely on business operations under hire purchase agreements and leasing contract. The total borrowings in 2008 and 2009, including current and non-current borrowings, are AUD12.23 million and AUD16.92 million respectively (Cash Converter International Limited Annual Report, 2009).

 

Business structure and operations

 

CCV is a global company in Australia. Its business covers 21 countries including Australia and United Kingdom. CCV head office is located in Perth, Australia. Today, CCV has an average number of 138 employees.

 

Cash Converters' core business is the ownership and franchising of financial services and retail stores. It retails second hand goods and suppliers of financial products. During the expansion of the business, CCV business has changed their consumer perceptions of its industry by introducing modern retailing practices, expert management skills and high ethical standards to the management. These changes has positioned CCV itself and franchised outlets, creating a profitable market for the group. As the global master franchisor of the franchising concept, CCV has granted trademark licenses to enable independent units to build up a matching franchise chain in other country in return for a passive royalty income (Cash Converters International Limited Annual Report, 2009).

 

In the aspect of management, CCV has three major departments which are board of director, audit committee and remuneration committee. Board formed by executive directors who set the company's strategies direction and protect shareholder's fund. Meanwhile, audit committee will assist board of directors in fulfilling responsibilities for financial reporting besides providing recommendations if necessary. Lastly, remuneration committee maintains the policy that makes remuneration package of senior executives correctly reflect their duties and responsibilities (Cash Converters International Limited Annual Report, 2009). In addition, there is a management team which responsible to maintain company's daily operation.

 

The major source of income in CCV includes trading in financial products, corporate store revenue, franchising royalty income and financial service commission. In the financial year of 2009, the total revenue has increased by 26.9% to AUD94.4 million. These is due to the increase in financial products of $3.6 million, an increase in corporate store revenue of AUD16.5 million and an increase in financial services commission of AUD578,896 (Cash Converters International Limited Annual Report, 2009).

 

CCV faces high competition from competitors such as EZCORP, Cattles and Cash America International. EZCORP is the one of the biggest company of pawnshop in the US. It offers second-hand goods such as electronics and sports equipments. Besides, it also provides unsecured loans, such as payday loans or payroll advances through its EZMONEY stores. Meanwhile, Cash America International and Cattles provide personal loans to customers. Cash America International allows its customers to get high-interest loans with jewelry, electronics and other valuable items. Therefore, its stores may sell unredeemed products. These kinds of businesses are similar with CCV and may potentially threaten the company's strategy direction and business operations.

 

SECTION C INDUSTRY ANALYSIS

 

Global economy analysis

 

The very recent world financial crisis caused by the US Sub-prime crisis left many famous investment firms and banks going bankrupt as economies around the world begin to face recessions and drop in growth levels. Those days have passed and it is seen that as of this moment we are heading into the recovery zone in the business cycle.

 

The micro-loans and pawn shop industry that CCV operates has had its fair share of ups and downs as no one could mitigate market risk. When the downfall of large investment firms such as Lehman Brothers collapsed in mid September 2007, many investors were worried and panicked as people around the world suddenly became short on cash (Reserve bank of Australia, 2008). Many housing loans which were assumed to be good loans turned into unperformed loan due to the sudden change in interest rates and people's inability to repay these loans creating a massive financial bubble that exploded and triggered a mass shortage of funds. During such a time, many people would eventually flock to pawn shops to auction off valuable items for emergency cash while the banks were pumped by governments to give out more loans to the public to help ease this cash shortage. This industry had its fair share of people seeking micro emergency loans in such dire times as well. It could be said as a blessing in disguise because there is no guarantee that people would repay the loans at such a time. There is also no telling how long would a pawned item would be able to resell again.

 

While the effects of the crisis shut down countries like Greece that went into insolvency and the entire Europe experienced recession with drops in GDP growth except Poland, the effect has not affected much on countries such as China, India and Australia who produce positive GDP growth in the same period of time. This indicates that CCV business in the US and Europe regions might be affected but its business in Australia will continue to flourish.

 

Australia economy analysis

 

The most recent sub-prime crisis in the US did not have as much impact on the Australian financial system because of Australia's low exposure to the crisis. Due to this, Australia's economy continued to grow despite slowed growth in other countries in the world. Therefore, CCV business in Australia will continue to maintain while it has to pay more attention to its UK offices instead.

 

It has been forecast that the recession of the late 2000 has come to an end and economies around the world has already showed signs of recovering despite skepticism from various analysts suggesting that there is still another bear and bull curve incoming before the recovery phase can come. Otherwise the future of the world economy can be considered to be steadily getting better and businesses would resume growth in the near future.

 

Figure C-1 displays the Gross Domestic Product (GDP) of Australia in US Dollars over the past ten years. From the graph, it can be observed that in ten years time the Australian economy has almost tripled in GDP as recorded from January 1999 of $391 billion dollars up to January 2009 of USD1015 billion dollars. This is worth 1.64% of the total world economy according to the World Bank. The Australian GDP has expanded by an annual rate of 0.90% from the last quarter. Although the Australian economy is dominated by its services sector such as education services, its economic success is surprisingly contributed by its wealth of agricultural and mineral resources.

 

The Australian economy outperformed its neighbours made its dollar the best performer and among the most traded currencies in the past year. Australia's economy is further expanded by government spending by Prime Minister Kevin Rudd locating AUD22 billion on infrastructure developments such as schools, ports, roads and railways.

 

The number of jobs in Australia has also increase while its unemployment rate decreases because of this growth. The percentage is only higher as displayed in Figure C-2 due to the increase in Australia's economic growth. This means that although the unemployment rate is seen to have increase, it in fact has not increase by that much because it must be taken into account that the job rate in Australia has also increase tremendously. The small amount of unemployment rate coupled with the high Australian GDP growth serves to increase the potential and continued existence of domestic businesses and stimulate even more growth in Australia.

 

From Figure C-2, inflation rate of Australia can be considered as decreased over the ten year period although it is being seen steadily increasing back in the most recent record and lies at 2.9%. Lower inflation rate bolds well for CCV to conduct its business in Australia as the prices of products and small loans can be more controlled and stable.

 

It is from this basis stand point that Australia having strong core strength in its services, agricultural and mineral industry along with rapid expansion that the future of Australia's economy will continue to grow expansively while its currency would be one of the most traded as well.

 

Pawn-broking industry analysis

 

The industry which CCV is dealing in involves credit loaning; buying and selling second hand items. It's deemed as a firm of modern and efficient version of the olden day's pawn-broking. There is less competitors in this industry due to its uniqueness of this kind of business. However like in every industry there do exist competitors and these competitors are few but large such as EZCORP, Cattles and Cash America International.

 

The key successes that made this industry unique and successful are due to its offer for people, the ability to take small loans from a hundred bucks up to a maximum of ten thousand without the hassle of going through a bank. Besides, the ability to pawn items for pure cash through the counter allows customers to have quick cash for emergency uses. In today's modern world, it is difficult to find trustworthy pawn shops. This ability for the modern people to acquire quick cash in today's world has been much overlooked due to the 21st century mindset and habits of assuming that our banks can provide such services. However, many people do not understand the long procedures for loan approval as well as the tedious waiting time it comes with and the inability for banks to provide loans lower than ten thousand. Banks also do not accept gold rings or diamond necklaces in exchange for cash. Overall this industry's mission is to provide people of the modern world the capability to have access to cash quickly and easily.

 

The potential weakness of this industry is that there are initially limited products to be sold with. All they do is give out micro-loans and accept second-hand items for cash with the hopes to resell these items for a higher value or waiting for the owner to reclaim it in the future. This involves various work process and frequent monitoring from the management. Another issue dealing with second-hand products arises which not everyone, especially in today's world of “use and throw” would be willing or would want to purchase a second-hand coffee table for example and the industry would run the risk of accepting too much of potential redundant products. These pawned items from customers also do consume storage space and eventually too many items in a shop creates space constraints. Cultural differences also creates an artificial barrier for this business to be successful in places such as Malaysia where very few people would bother to walk into a pawn shop and purchase used items, many would rather buy brand new. However there are still people who would purchase second-hand items for money savings purposes.

 

Risks involved in pawn-broking industry

 

One risk involved that has already been mentioned is the risk of defaulting loans. It must be understood that these loans are dissimilar with bank loans. These are small loans and a single small loan defaulting would not has such a big impact such as a single bank loan defaulting, thus it would require a large amount of small loans to default together to create a huge enough problem for the company. The chances of this much small loans to default would be considerably low provided that CCV continues its good record and practices of sound and prominent lending and monitoring management. Small loans could also be charged a higher interest rate compared to a single big bank loan and these small loans together create a huge profit margin for the company itself.

 

Meanwhile, there is risk of space constraints by accepting too much redundant used items that nobody would ever want. CCV has over twenty years of experience in this sector of pawn shop trade and is still doing well and it would only be safe to trust their expertise that every item they accepted in their shop has the potential to find a new owner that would increase their profits.

 

Another risk worth mentioning is the risk of competitors such as EZCORP, Cattles and Cash America International. Like in any industry that has the potential of money making, there will be competitors as long as the government and world economy allows its existence. EZCORP is by far the largest competitor in this trade at this time, while Cattles and Cash America International have their own respectable piece of the pie too. However it should be noted not all of these competitors are competing in the same markets. CCV main business operations are located mainly in Australia and the United Kingdom while EZCORP and the others are operating mainly in the United States of America and a good portion of Europe. Many are spreading their business throughout Asia as of this moment however. Another note worth mention is that the largest competitor, EZCORP has a thirty percent share holdings in CCV since 2009 and now has two of its representatives on the CCV board. This could mean many things but most importantly is that this means recognition of CCV from a strong competitor and wanting a share of its profits or control by doing such a huge buying of its shares during the economy recession. Thus this could potentially tell us that sometimes, it is just better to keep your enemies closer.

 

SECTION D FINANCIAL ANALYSIS

 

Financial analysis is the most essential process in any lending policy. It provides clear picture of financial position of a business by assessing its capacity, financial stability and capability to repay the loan.

 

Short-term liquidity

 

Short-term liquidity is determined by the timing of cash inflow and outflow along with its prospects for future performances (Wild, Subramanyam & Halsey 2003). Three key ratios being analyzed are the quick ratio, current ratio and account receivable collection periods.

 

From Figure D-1, both quick and current ratio declined significantly in 2008 due to CCV's excess working capital. The company did not have much borrowing ($1,049,147) in year 2007. However, borrowings increased by 332% in year 2008 to $4,539,025 and $3,942,312 (year 2009) which lowered the current and quick ratio. This is due to the purchase of 8 Cash Converters stores in Victoria from existing franchisees which costs $11.9million (Cash Converters International Limited Annual Report, 2008). Nonetheless, all current and quick ratios are above 1, indicates that CCV is more likely to have minimal liquidity risk. Quick ratio composes more accurate liquidity ratio by excluding inventories and less liquid current asset. (Wild, Subramanyam & Halsey 2003). Table D-1 shows that CCV has quick ratio above 1 which will be favorable for borrowings. Nonetheless, CCV has lower current and quick ratio compared to industry average especially quick ratio which declined over years would be a concern as well.

 

Accounts receivable collection period shows efficiency level in collection of receivables from trade debtors (Sathye et al. 2003). Based on financial statements, CCV's credit terms to trade debtors are 30 days. Figure D-2 shows that accounts receivable collection period for year 2007 is 44 days which is higher than industry average (38 days). Nevertheless, it drops to 26 days in year 2008 and 2009 which is lower than the industry average. This is due to significant increase in CCV's trade receivable: 63.43% (year 2008) and 27.05% (year 2009). One of the critical point that should be emphasized is that in pawnbroker industry, most of the revenue generated from short and medium-term cash advance. With the accounts receivable collection period lower than 30 days and industry average, we would consider that CCV manages to handle its debt collections and liquidity issue efficiently.

 

In the assessment of short-term liquidity, CCV does not impose any sign of liquidity risk. However, it would be wise if CCV has more liquid assets such as cash in hand to cover shrinkage in non-cash current assets values. In addition, CCV should improvise and maintain its accounts receivable collection period as low as 24 days for stable and sufficient cash flow.

 

Long-term solvency

 

The analysis of long-term solvency is applied to identify CCV's ability to cover long run financial viability and fulfill long-term obligations (Wild, Subramanyam & Halsey 2003). Debt to equity ratio, fixed charges coverage ratio, and interest coverage ratio are the key ratios for this assessment.

 

Based on Figure D-3, CCV debt to equity ratio increases constantly over the past three years. The ratios are below 1 and industry average due to its low liabilities in borrowings ($1,579,165 for year 2007; $12,228,746 for year 2008; and $16,920,346 for year 2009). These ratios indicate that creditors are better protected with higher equity. If the company goes insolvent, SPB will be paid before the stockholders.

 

Fixed charges coverage ratio extends the interest coverage ratio to account contractual commitments under leasing agreement (Hempel & Simonson 1999). Figure D-4 shows that fixed charges coverage ratio has declined from 12.30 (2007) to 3.64 (2009). This is due to higher earnings before interest and taxes (EBIT). Higher ratio compared to industry average indicates that CCV manages to cover on its debt and lease payments with its high operating profit ($91,035,630 in year 2007; $74,405,882 in year 2008; and $94,398,170 in year 2009).

 

Interest coverage ratio indicates the sufficient level of resources to cover the interest portion of its debt obligations (Sathye et al. 2003). Table D-5 shows that CCV has a very high interest coverage ratio in 2007 due to its low interest on loan ($162,851). High interest on loan in year 2008 ($944,772) and 2009 ($1,129,562) decreased the interest coverage ratio significantly. This is due to high borrowings in 2008 and 2009 to purchase existing franchisee stores. Nevertheless, CCV is considered as financial stable as the ratios are 50% higher than industry average. This ratio is expected to decrease as the company plans to expand its business by increasing its stores from 6 to 22 stores in United Kingdom and Australia (Cash Converters International Annual Report, 2008).

 

In the judgment of longer-term solvency, CCV has stable financial status. In fact, it has outperformed compared to the industry average. The company has less debt liabilities and therefore paying less interest on loan. In addition, CCV has stable growth in operating profit which increases the company ability to repay borrowings and interest.

 

Business performances

 

Business performances analysis focuses on the sustainability and adequacy of CCV's earnings (Bergevin 2002). Specifically, this part plays important role in identifying the value, solvency, and liquidity of the company. Net profit margin, return on assets (ROA) and return on shareholders' equity (ROE) are the essential part of analysis widely used by companies and borrowers for assessing operating performances.

 

According to Table D-6, all 3 ratios are stable with minor fluctuations over the 3 financial years. The net profit, total assets and total shareholders' equity have increased progressively over the period. In the ratio perspective, CCV has higher net profit margin compared to industry average. This indicates that CCV has more excess profit after sales and hence perform better. Meanwhile, CCV has higher ROA compared to industry average. Assets are invested well and thus generating steady growth of earnings. In comparison, Cash America International, one of CCV competitor recorded only ROA of 0.08 in year 2009 which is 75% lower. Additionally, CCV achieved higher ROE compared to industry average. The company strictly controls major purchases, trying to achieve corporate objective which is to achieve high profitability and maximize shareholders' wealth.

 

Cash flow analysis

 

Cash flow analysis mainly evaluates operating cash flow to identify a company ability and capacity to generate sufficient cash from business operations over time (Bergevin 2002). From the analysis of three financial years (Appendix I), CCV managed to have net cash inflow on operating activities. Receipts from customers are the major resource of these inflows. Besides, interest from personal loan contributes to the cash inflow as well. Nonetheless, high amount payments to supplies and employees besides payment of income taxes reduced the net cash in the operating activities.

 

CCV has deficit cash flow in the investing activities. Net cash paid for acquisitions of controlled entities are the main cash outflows. This amount increased 80.46% due to acquisition of 6 franchised stores in UK and 8 franchised stores in Australia (Cash Converters International Limited Annual Report, 2008). In addition, the company has opened its first corporate store in NSW which increase the deficit from investing activities.

 

Meanwhile, CCV has positive net cash flow in year 2007 ($6,949,947) and 2008 ($1,391,263). However, it recorded negative in year 2009 (-$8,258,678) resulted from decrease in revenue and also increase in payments to employees. Another significant cause is the increase in personal loan. The amount increased 181% to $7,503,859 in year 2009. Overall, significant increase in acquisitions of existing franchisee, plant and equipment indicate that CCV is urged to boost its capacity, expanding the business and also market share in near future. Therefore, CCV has proven to SPB of its long term viability in operations and business.

 

Cash flow adequacy ratio is essential in measuring borrower's capability to generate sufficient cash from its operations to cover annual payments of all long-term annual debt (Wild, Subramanyam & Halsey 2003).

 

Figure D-7 shows that the ratio increased in year 2008 and decreased significantly in year 2009. This is due to recent purchase of plant and equipment which cost $1,504,176. Even though the ratios are lower than industry average, ratio higher than 1 indicates that CCV is stable and manage to cover its contractual obligations and debts from its operating activities cash flow.

 

SECTION E SECURITIES

 

Securities are collateral of a loan and essential tool in any loan approval (Sathye et al. 2003). Securities could be in various forms and features such as contracts, promises, property, share holding or guarantor. If the borrower defaults, lenders could repossess and realize the collateral to recover its claims against the borrower (Ganguin & Bilardello 2005).

 

CCV has total assets of $114,783,114 and total liabilities worth $32,293,454 giving a net asset of $82,489,660 (Cash Converters International Limited Annual Report, 2009). The company has $4.6million worth of plant and equipment in assets which could be used as collateral in the $10million borrowing. Nonetheless, CCV may be required to place additional assets as plant and equipment are illiquid and may depreciate.

 

Unlike any ordinary company, CCV does not posses any real tangible asset besides their outlets and the second-hand products it holds. In any security it is important to ensure that such a security is easily convertible to cash, this is not the case for outlets and second-hand products. Thus it may not seem attractive to be used as security in this structure. It should be noted however that if things go wrong, a possession of the ownership of this business to the lender would be beneficial as well because the value of the business could surpass the amount loaned. So this method could well serve as part of the security to the loan because these are tangible assets that cannot disappear overnight. Their only weakness is that it is not easily convertible to cash.

 

Another good way out for securitizing this loan would be the portfolio of micro-loans CCV possesses. These micro-loans amount to millions and the latest interest received from personal loans amounted up to $13,997,544 in value before tax. This portfolio of loans could be used to secure the $10 million dollar loan that CCV would borrow to expand its business.

 

Another option is the acquisition of a good portion of the company's shares should a default happen. At the moment Cash Converter's share prices on the ASX are valued at 0.580 per share and seem to be performing rather solid in the past year, rising in value despite the financial crisis. However this is not a very attractive option because of the high uncertainty of share prices and stability of the value at hand. Moreover should a loan default, it could mean that the company isn't doing too well and thus affect its share prices even further.

 

SECTION F KEY STRENGTHS & WEAKNESSES

 

The strengths

 

The company employs professional management team who specialize in pawn-broking and personal loan business. They lead CCV into reliable retail merchandise stores, contributing to a profitable market for the corporation.

 

CCV has considerably low debt in year 2007. In year 2009, the borrowing of the company has decreased. Most of debts are used to finance acquisition to expand its business and market share.

 

CCV has the ability to payback all of the interest expense in the previous years. This indicates that the company able to maintain the ability of interest costs repayment.

 

CCV has large regional services coverage within United Kingdom (UK) and Australia. Demand for pawn-broking, secondhand goods and personal financial loan services are maintained at high levels and better options compared to loan from banks.

 

CCV aims to expand its business in UK and Australia. Acquisition of existing franchisees and opening of new stores reflect the sustainability of larger market share in near future.#p#分頁標題#e#

 

The performances of personal financial loan and pawn-broking are maintained at high level. This reflects the stability of business operations.

 

The weaknesses

 

CCV is more likely to increase inherent liquidity risk and negative working capital. Therefore it may unable to cover debt by using the current assets.

 

Mitigation of risk:

 

CCV should increase its current assets (cash in hand) and reduce its current liabilities to minimize liquidity risk as well as increase the working capital.

 

2. Although CCV has higher net profit margin compared to industry average, the company profit is slightly increased and unlikely to maintain the high level due to the economic downturns.

 

Mitigation of risk:

 

CCV should improve its business operations and maintain sustainability, such as reduce expenses. Moreover, the high fuel prices, as occurred in previous year, are unpredictable and may occur again. Therefore, CCV should hedge the commodity prices of fuel efficiently and appropriately.

 

3. CCV has relatively high customers' debts. In addition, bad debts had increased twice from 2007 to 2009.

 

Mitigation of risk:

 

CCV should impose stricter loan approval. Only eligible borrowers will be given financial loan to reduce unperformed loan.

 

4. CCV cash in hand decreased drastically in year 2009 due to high operating cost. It may face difficulty in sustain sufficient cash flow to repay its debt in case of unexpected change of condition.

 

Mitigation of risk:

 

Increase cost efficiency by reducing unnecessary expenses within business operations.

 

n the case of CCV, the company requests a loan to open new store by acquiring land at Sydney Central Business District (CBD). Finance lease is considered as the most suitable asset finance facilities as it preserves working capital and maintains sustainability of business operation.

 

Pricing of the loan

 

Consideration of pricing consists of effective taxation rate, returns on assets (ROA) and interest rate. Bank requirements such as Basel I, as well as market conditions have to take into the consideration of the pricing.

 

Loan covenants

 

The borrower is required to have insurance coverage on plant and equipment as well as inventory to avoid catastrophic loss of collateral.

 

Submission of financial reports shall be submitted on quarterly basis; accounts receivable on monthly basis for lender continuing assessment.#p#分頁標題#e#

 

Prior approval from the lender is required before any changes are being made in management structure and business operations.

 

Borrower is responsible to forward company's policy and premium receipts to the lender.

 

The borrower shall not give any security interest of its assets to other party except the lender.

 

The lender has the authority to inspect the company's business structures and operations, at all reasonable time.

 

The borrower is required to sustain its key financial ratios at current or a better level.

 

The borrower is responsible to make a repayment of the principal and interest of the loan in monthly basis.

 

If the borrower unable to make repayments, the lender has the authority to debit the amount from the borrower's accounts and reserves the right to change the loan covenants in the experience of poor loan repayment.

 

The lender has the right to possess borrower's securities and collaterals set out in the loan agreement in circumstances that the loan has defaulted.

 

Securities strengths

 

First way out - assets acquisitions

 

With all options in mind, it would be wiser to seek a mix of both tangible assets such as company plant and equipment and a reasonable value of its portfolio of interest generating micro-loans that shows higher potential to generate returns as the first way out. The mixing of these options is to ensure not all eggs are put in one basket, meanwhile plant and equipment are easier to be estimated at a fair value for the purpose of collateral while the portion of the portfolio of loans would accompany this by providing its fair share of worth, being able to resale this portfolio of loans or use it to collect interests over time. The options are wide in this scenario.

 

Second way out - shares and ownership acquisitions

 

If all else fails, the proposed second way out would be the acquisition of shares and ownership of the company so that we could takeover whatever is left of the company and continue its business for as much as possible to resale its remaining second-hand items in stock and collect its remaining loans and interest back from its borrowers. The ownership of shares of this company could also mean the right to resale this business into other potential corporations such as its larger competitors who would be interested to takeover Cash Converter's assets instead to further help expand their own influence at a much faster rate.

 

LIST OF REFERENCES

 

Australian Bureau of Statistic, Consumer Price Index 2010, viewed on 20 March 2010, .#p#分頁標題#e#

 

Australian Bureau of Statistic, Unemployment Rate 2010, viewed on 20 March 2010, .

 

Begervin, PM 2002, Financial Statement Analysis: An Integrated Approach, Pearson Prentice Hall, New Jersey.

 

Cash Converters International Limited 2007, Annual Report for the Year Ended 30 June 2007.

 

Cash Converters International Limited 2008, Annual Report for the Year Ended 30 June 2008.

 

Cash Converters International Limited 2009, Annual Report for the Year Ended 30 June 2009.

 

Cash Converters International Limited 2010, Company Overview, viewed on 18 March 2010, .

 

Hampel, GH & Simonson, DG 1999, Bank Management: Text and Cases, 5th edn, John Wiley & Sons, New York.

 

Reserve Bank of Australia 2008, Statement on Monetary Policy August 2008, RBA, Sydney.

 

Sathye, M, Bartle, J, Vincent, M & Boffey, R 2003, Credit Analysis & Lending Management, John Wiley & Sons, Milton.

 

The World Bank, GDP (Current US$) 2010, viewed on 20 March 2010, .

 

Wild, JJ, Subramanyam, KR & Halsey, RF 2003, Financial Statement Analysis, 8th edn, McGraw-Hill, New York.

 

[1] Interest rate for the loan after calculations of factors included in Table G-2.

 

[2] SPB requires 7.50% liquidity against lending assets, which currently returning at 7.10%.

 

[3] Service charges and fees are listed in Table G-3.

 

[4] Current interest rate on deposit determined by major banks in Australia.

 

[5] Taxation rate of Australia company.

 

[6] The return on equity (ROE) of the bank determined based on the rate from major banks in Australia.

 

[7] This amount determined from the request of loan amount from CCV ($10 million), and the Basel I capital adequacy requirement: capital requirement - 8%; risk weight of the loan - 50%.