King Abdulaziz University

Faculty of Economics and Administration

Master of Applied Finance and Investment Program

Applied Corporate Finance, FINE-610

Subject Leader: Dr Faisal Alnori

Group Project

Bank loans are considered key sources of corporate financing. However, the process of bank
financing to corporations requires cautious evaluation and assessment.

Banks evaluation relies on analyzing the borrower's financial statement (balance sheet, Income
statement, cash flow statements). Further, banks look at asset management (inventory and
receivable turnover) capital structure, management efficiency, and market and economic
conditions. The reason banks conducted the mentioned evaluation is to ensure that the company
can pay back the loan on time. Overall, significant evaluations are required in terms of corporate
working capital strength, profitability, and ability to compete within the industry.

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Project Requirement

Please select a listed non-financial corporation from the Saudi Arabian Main Stock Exchange –
TASI-. The selected corporation is applying for an SR100 million loan from a local bank to
finance its current and future projects.

If you are a financial or a credit analyst in the corporate credit department of the bank, what is
your recommendation about the credit proposal provided by the selected corporation?

The report should contain the following sections:

1. Abstract
 100 words summary of the report purpose and key findings.
2. Introduction to the report.
 What the report is about.
 What is the objective of the report?
 What is the main recommendation of this report?
 What is the structure of this report?
3. Company background and history.
 When the company is established
 What are the company's main activities, product type, and business model?
 When the company has been listed in the capital market.
 What is the market value of the company?
 Present a line graph showing the company stock price movements during the past
10 years (use annual closing price). Further, it is recommended to present the
stock price movements for 2 further companies operating within the same
industry, besides the market index. It is recommended to explain possible factors
that may explain the trend of the company’s stock price.
 Presents the corporation's main owners.
 Report on the company’s top management team and the board of directors.

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4. The industry background (i.e. the industry in which the company operates).
 Report the sector in which the corporation operates.
 Who are the main competitors (i.e. list all corporations in the same industry)?
5. The corporate current creditors.
 List the corporate current creditors. Also, report the amount of financing obtained
from each creditor, if possible.
6. The corporate market share and SWOT Analysis.
 The key rationale for doing this is to show how the corporation is competing in
the industry. Students are required to compare and evaluate the chosen firms’
market share with all firms in the same industry.
 Conduct a SWOT analysis as a strategic tool to detect the company’s strengths,
weaknesses, potential opportunities, and threats.
7. Conduct the appropriate financial analysis (ratio analysis) to evaluate the company’s
financial position.
 To accomplish this task, please apply the material provided on the Financial
Analysis topic. Furthermore, you must compare all applied ratios with all
corporations in the same industry to precisely evaluate the performance of the
selected company among its competitors.

Please note that the required financial ratios (Financial Analysis) are

 Profitability ratios
 Liquidity ratios and working capital strength.
 Assets management ratios
 Debt utilization ratios.
 Evaluate the company’s cash flow statement in a specific year (last year). In doing
this, it is important to ensure that the company’s cash flow is achieved from its
operational activities.

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 8. Recommendations.
 In this section, students are expected to present their final decision about the
approval or rejection of the financing proposal. Students MUST justify the
reasons for their final recommendation. Please note that it is very important to
make your recommendation based on the outcomes of your analysis.
9. If you are a financial consultant, we solutions can you offer the company’s top
management to enhance its current situation. Please make sure that your solutions are
appropriate and can add important value to the corporation selected.
10. References
 In this section, please list all the applied references in alphabetical order. Please
use the APA referencing style.
11. Appendix
 All the applied formals, equations and additional information can be presented in
this section.

Deadline: This project MUST be submitted before Meeting 6.

The number of students in each group should not be more than 3 students.

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 Group Project Assessment Criteria (Rubrics)

Report Component Requirements Percentage

Introduction Needs to be clear and let the reader know about the key elements 10%
and the main purpose of the project.
Content. Must be accurate and comprehensive. 20%
Information, knowledge and Needs to be obtained from reliable sources, such as the company 25%
critical thinking. has audited financial statements and analyst reports. Further,
Students are required to show effort to show elements behind the
calculations conducted in the financial analysis.
Organization. Students should consider that the flow of information has to be 10%
consistent.
Conclusion and To final recommendation related to the rejections or approval of 20%
Recommendation the credit proposal needs to be based on the information
demonstrated in all sections of this report. For example, if the
company shows weak financial performance, then, it does not
make sense to approval
Writing, Grammar and Report The report should be written professionally and avoid 10%
Presentation and quality grammatical and typing errors.
References Need to be reported at the end of the report following the APA 5%
referencing style.

Good Luck and All the Best