BU7056 Credit, Lending and Risk Management, Assessment Brief 2024-25 | University of Chester

Assessment Task

Select a non-financial sector company which is listed in the UK. Based on your selection, address the following scenario. 

Assume you are a credit and risk consultant working for a lender. You have been asked to assess the company’s creditworthiness and consider whether you would recommend lending that company an amount equivalent to 5% of its average turnover over the last 3 years. The company is expected to use these money to expand its operations within the UK. The repayment period is for negotiation and can be between 1-3 years.  

Write a report which specifically considers the following:

• Appraise the company’s creditworthiness considering financial, management, strategy, and business environment information. 
• Critically evaluate the specific risks in lending that company, under the current external environment conditions and the ones you anticipate over the repayment period. Make sure you clarify what the latter are.  
• Critically evaluate what covenants you will consider before deciding in favour of lending the company.  Summarise your lending decision, including the risks, covenants, and the acceptable repayment period, highlighting the overall sustainability impacts of this decision. 

N.B You should confirm your selection of company with your tutor before preparation.
Tesco Plc is not permitted for use as a selected company.

Note:

References to high quality academic sources must be used to support your work and this should include the key textbook readings from the module. In addition, a range of peer review academic journal articles should be cited and referenced, this should include several articles from highly ranked journals as listed below. 

All work will be passed through anti-plagiarism software.

Learning Outcomes

This assignment will show that you are able to:

LO1: Explore the theoretical underpinning of commercial lending and risk management within the context of the funding needs of the customer. 

LO2: Appraise the strategy, performance, and creditworthiness of a business, taking current and expected economic, market and sector factors into consideration. 

LO3: Identify and examine relevant risks associated with commercial lending environment to facilitate complex decision making. 

LO4: Critically appraise the legal framework required to mitigate the potential risks associated with commercial lending in both domestic and international markets.

Key Resources.

1.    Data: Use relevant databases or annual reports to extract financial information for the companies (s) in question. Your data should be comprehensive enough to investigate the potential differences in the average profitability before and after the merger/acquisition using relevant statistics. Some of the recommended sources/databases are: 

FAME     Financial Analysis Made Easy  
Reuters     https://www.reuters.com/finance/global-market-data  
Yahoo Finance     https://uk.finance.yahoo.com/  
Financial Times     https://www.ft.com 

2.    Recommended Reading List  
Choudhry, M. (2012). The principles of banking. John Wiley & Sons      

CIMA Text (2023). Risk Management. Kaplan publishing

Crouhy, M., Galai, D. & Mark, R. (2014). The Essentials of Risk Management: The Definitive Guide for the Non-Risk Professional. (2nd ed.). McGraw Hill.

Dionne, G. (2019). Corporate Risk management: theories and applications. Wiley & Sons.

Hillier, D., Clacher, I., Ross, S., Westerfield, R. & Jordan, B. (2017). Fundamentals of corporate finance, (3rd ed.), McGraw Hill.

Hull, J. (2018). Risk management and financial institutions. Wiley & Sons.

Kaplan, J. M., Bailey, T., O'Halloran, D., Marcus, A., & RezeK, C. (2015). Beyond cybersecurity: protecting your digital business. Wiley & Sons.

Lam, J. (2017). Implementing enterprise risk management: From methods to application. Wiley & Sons.

Masood, O. & Javaria, K. (2018). Risk Management implementation and solutions for Islamic banking and finance. Cambridge Scholars Publishing.

3.    Online Journal databases

1) Emerald Insight Database. (2022). Emerald Insight [UoC Library Search].URL to Emerald Insight Database

2) FT Database. (2022). Financial Times Newspaper. [UoC Library Search]. URL to Financial Times Database
3) IBIS World Database. (2022). IBIS World. [UoC Library Search]. URL to IBIS World Database