Credit Evaluation School, Sacramento, CA

CLASSIFICATION • Point out all of the reasons for classification – Marginal or Insufficient collateral – Poor or weak financial condition – Lack of a repayment plan – Past due status – Others?

CLASSIFICATION EXAMPLE – POOR OR WEAK FINANCIAL CONDITION • ABC Corporation’s 12-31-x9 audited financial statements reflected TA of $1,200M, TL of $2,000M, and negative NW of $800M. Also reflected was GP of $2,000M, COGS of $1,000M, Operating Expenses of $1,200M, and Net Loss of $200M.