Fifth Third Bank Case Study

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Fifth Third Bank Case Study

• Claire Lin
• Ezra Hurwitz
• Nana Frimpong

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NIPM Northwest Indiana Parts Manufacturer

• Manufacture small, frequently-replaced machine
  parts
• Diverse client base

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Intentions

• Upgrade/replace equipment
• Increase
• Efficiency
• Production
• Sales

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Issues

• Short Term
• Cash Flow
• Increase in receivables
• Slight increase in payables
• Production stagnation

• Long Term
• PIA pending bankruptcy and payout
• Additional mortgage debt

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Solutions

• Short Term
• Account managers to collect old debt
• New equipment generating new sales

• Long Term
• Increase sales through increased production, to
  mitigate loss
• Legal action involving PIA

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Bank Considerations

• Positives
• Stellar credit
• Increasing sales
• Expanding customer base

• Negatives
• Increasing receivables
• PIA bankruptcy

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Steps to take

• Take out a mortgage
• Past year financial figures
• Cost benefit analysis of new equipment
• Overview of management strategy

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Take Out A Mortgage

• Company owns building and land
• Value of building 2M
• Value of land 4M
• Combined value 6M
• Cost of new equipment 3M

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Financial Figures - Fiscal Year 03-04
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Cost Benefit Analysis of New Equipment in Units
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Cost Benefit Analysis of New Equipment in Sales
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Overview of Management Strategy

• Encourage aggressive debt collection policy for
  account managers
• Implementation of Debt Collection Schedule
• Increase management involvement in debt
  collection
• Offer incentives to managers with low debtor days

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Overview of Management Strategy

• Improve evaluation of clients
• In depth assessment of credit history
• Closer examination of clients cash flow
• Health of industry
• Ability to meet customers demands

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Summary

• Purpose of loan
• Obstacles to over come
• Projected benefits

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