[MUSIC] So, what we're going to do, instead of me giving you theory all the time, we're going to base these lectures on a case. In this case it's called poly panel. [MUSIC] Please come in. [CROSSTALK]. >> How are you? >> Good, good how are you? Please have a seat. >> Nice to meet you. >> Good to see you. So how may I help you today? >> I'm coming to see you >> Mm-hm >> Because I need financing for my business of fanos in the area of Munich >> Ok >> and I know your bank is very well known in the area, so I'm coming to ask you for a half million euros. >> Half a million? Why do you need half a million? >> Well, my business is growing a lot >> We are financing in other banks, and we would like to, to unify everything with only your bank. >> Okay. Do you have a document so that we can review your? >> Yeah, yeah, of course. I can show you. So, the P and L and the balance sheet, so you have all of the details about The financial of the company. So hopefully you can, you can give me feedback. >> Okay. >> Once [INAUDIBLE] that. >> Sure. Let me take a review, internally, and we'll try to get back to you as soon as possible. >> Okay. >> Great to see you. >> Thanks. >> Thank you so much. >> Bye bye. >> Thanks a lot. >> Okay. Thank you. >> Thank you for coming. Bye. [MUSIC] >> I sent her an email. >> Hello people, how are you? >> Doing well? Did you go to bar last night? >> Yeah, of course. Planning for the summer. >> [LAUGH] Okay, okay. That's great. So guys, today I met with Mr. Mishstein, who is making the panels, and he's asking for half a million euro loan. And I wasn't sure about this business. He's really nice give. He's very aggressive. But I just need your help to revue the and balance sheet. To decide whether we should make a law or not. >> Right. >> Sounds good? >> Sounds good. >> That sounds good? I trust you guys, okay? >> When are we supposed to get to you with our? >> I'll be back in an hour or two so if you can let me know your that'd be [MUSIC] Now it is very important, as you probably did before watching this first video. It is very important that you start by reading carefully this case. It's not a very long case, actually. It's just three pages, with the two financial statements. And if the of the case, a problem is portrayed to you. And the problem that we see in this case, is Mr. Lichstein, which is a company wants to ask for a credit of half a million Euros. Now, should the bank give the credit to this guy or not? [MUSIC] Okay, guys, thank you so much. So what do you guys think? >> I'm sure the costs, we have to be careful okay. >> No problem. >> So should the band give the credit? Well, before we go into that question I think it's very important that we understand the difference between what a credit line is and what a loan is. Let me explain it clearly. So the thing is, companies need financing. And financing can be long term or short term. For you to understand it in a very simple way, a loan is like a mortgage. You want to buy a house, you go to the bank and you ask for a loan. And the loan is for example, a million Euros. Imagine you want to buy a big house in Beverly Hills, for example. A million Euros, a loan mortgage. The bank gives you the million Euros and you have the million Euros That you have to pay over a period of 10, 20, or 30 years with interest. And this is long term and it's a loan. Now a credit line is a different thing. A credit line's like your credit card. Now, in your credit card, you have a limit. Let's say, for example, you have 1,000 Euros as a limit of your credit card. But you don't use the thousand euros. You go to the shop and you buy a pair of shoes, then you spend 80 euros with a credit card. Imagine that you only spent 80 euros during the whole month with a credit card. Now the credit line is what the bank is giving you as a limit, is 1000 euros. But you are only using 80, and the bank is going to charge you interest over the 80 that you have used. So, as you can see, that is variable. Some months you use 80, other months you use 360. So the credit line is something variable that you can use up to the limit of 1000. So, I hope that with this, you understand a little bit of difference. And in the case of Polypanel, the thing that we are trying to address, well the guy is asking, Mr. Lichstein, is asking for a line of credit, of up to 500.000 euros. Not a loan. It's not for long term stuff. It's for short term, it's for the operations. So he can use up to 500,000. So with his credit and loan difference, now we go back and say should the bank give this credit line of half a million euros, to Mr. Lichstein or not? Let's go and see it. >> Okay, so for me, it's a yes. Because your company is growing a lot. Over the past three years, they have shown 33% growth in the sales, so it's a good company to look at. >> Must say, they have accumulated too much debt, too leveraged >> [INAUDIBLE] He choose his clerks. >> Yeah but come on in. I mean this guy is, he's built a successful business. And I think it's also very important not only to look at the numbers, but to see what he's done, and see the profile of this guy, so. >> A committee of the people. >> I understand of course on top of that, the industry is booming right now. So we have lots of and the market outlook is very promising. >> Those are more feelings, I have numbers. And I have been studying with Mr.Pierce, and the profitability levels are much higher with Trudeau. So for me, it's a clear no. I'm sorry. >> But it's also profit, but it's also take a look at his costs too. And he's got those under control, so and then that's me, it's a yes. >> Okay. So, it's good and bad. >> It's good >> It's mostly bad. >> No, it's good. >> Now I have to make decision. I think I need to get some coffee or something. I come back after I think and [INAUDIBLE] >> Okay. >> Thanks guys. [MUSIC]
