3.4 Case Study Example | Topics and Well Written Essays - 1500 words

3.4 - Case Study ExampleThis calls for very careful and prudent computer address policies, to avoid losses when clients become bankrupt.The industry operated profitably from 1985 to 1988, but a considerable recession that move out the economy in 1989 caused instability. As a result, the trucking companies lost revenues as manufacturers were reducing their transportation requirements as they cut down their operations. In fact, most of the trucking companies became bankrupt and the few that survived the situation showtimeered their prices to stay put competitive. Although the industry recovered from the recession in 1990s, the transportation industry in southern Ontario remained challenging as there were too many companies competing for few clients. By 2003, albeit the industry experiencing substantial growth, the profit margins remained very low since the prices were still very low.To survive with very low prices, the companies are forced to look for loans so they butt end operat e at high volumes to increase their profits. Besides, the trucking companies maximize the time they spend on the passage to increase sales so they can be able to repay the loans and their operating expenses.The Ministry of Transportation of Ontario (MTO) had introduced legislation that required all vehicles used by trucking companies to comply with strict safety standards. The ministry impounded any vehicle that failed to comply with these safety measures.Commercial Equipment Financing (CEF) carefully analyses its borrowers before approving loans, with the aim of increasing the recovery rate. This is particularly very important because the industry is undergoing very tough economic conditions and the chance of a keep company failing to repay the loan is very high. What CEF looks for can be summarized in terms of 4 Cs of Credit as analyzed below.The financial History of the borrower is referred to as