3. The growth in bad-debt expense for Chadha and Chadha Company over the last 20 years is as follows.
1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 |
0.11 | 0.09 | 0.08 | 0.08 | 0.10 | 0.11 | 0.12 | 0.10 | 0.07 | 0.09 |
2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 |
0.08 | 0.05 | 0.04 | 0.08 | 0.5 | 0.01 | 0.40 | 0.03 | 0.11 | 0.13 |
a) With the help of different statistical tools discuss the financial health of the company. (5 Marks)
b) Assume that you are a branch manager with a leading bank and if the Chadha and Chadha Company’s Managing Director approaches you with a funding request for its expansion plan, what will be your decision? Justify your decision based on your statistical analysis. (5 Marks)