Alfred Brooks Menswear Limited

The treasurer of a Toronto men's wear manufacturer attempts to negotiate bank financing for his company. The task is made more complex by the need to purchase material from Hong Kong and sales made to the United States and Italy.

This case is designed to take on the perspective of the corporation, or the bank supplying funds to the corporation, or both. From the standpoint of the corporation's CFO, the case introduces students to the financial management implications for a firm that both imports and exports goods. Some ideas in the case include: identifying the amount and duration of a firm's working capital needs; managing foreign currency exposure; managing the risks of offshore purchasing and selling; and structuring a working capital loan. From the standpoint of the bank, students should assess the opportunities and risks presented by a client that is importing and exporting. Some issues of interest to the banker include: identifying the client's needs; identifying what bank products (letters of credit, credit investigation, documentary collections, currency options, forward contracts) are suited to meeting those needs; and ensuring that the package suggested for the client represents acceptable risk and return to the bank. This case can also be used as a role-play opportunity.

• Bank Lending
• Foreign Exchange
• Credit