Read the following Harvard Business School case study:
- Mason, S. P., & Lawrence, E. R. (1991, December 13; revised November 22, 1993). U.S. Bank of Washington.
Prepare a financial ratio analysis.
Review the case study then address the following issues and questions. Spreadsheet tables can be pasted into a Microsoft Word document to highlight and summarize the main issues, but you should also include text discussion within your document that expands on the summary tables you present.
Case study analysis questions:
- Use the balance sheet and income statement representations within the help spreadsheet as a guide to discussing how a commercial bank such as U.S. Bancorp operates with asset choices and liability funding to generate net income. Use U.S. Bancorp and industry information presented in the case, where useful, to enhance your discussion.
- Describe the strategy of U.S. Bank and explain how lending to Redhook would fit or not fit this strategy. Use the loan portfolio composition presented within the Excel help file to guide some of the discussion. Include other information from the case as needed to support your discussion.
- What is Redhook’s strategy and how has it been performing? Complete and apply the table of historical financial ratios presented in the help file to support your discussion. Use other information contained in the case, as needed.
- How attractive are Redhook’s expansion plans and financial forecasts? Explain your position. Use the table of proforma financial ratios presented in the help file to support your discussion. Use other information contained in the case as useful.
- Would you approve the loan to Redhook? Use the decision matrix within the help spreadsheet as a guide to formulate and present your recommendation. Think of the various issues that should contribute to the analysis (i.e., the financial historical ratios of Redhook) and add rows to the matrix as needed.
Present your case study analysis in Microsoft Word document format and the financial analysis in Microsoft Excel spreadsheet format.
All written assignments and responses should follow APA rules for attributing sources.