SMITHFIELD MOTORS: A CASE IN LENDING, STRATEGY, AND VALUE

The primary subject matter of this case is financial statement analysis. Issues examined include analysis of risk, pro forma statement construction, business valuation, strategic planning, and small business growth. The case has a difficulty level of three to four, appropriate for junior or senior level. The case is designed to be taught in 2 to 3 class hours and is expected to require 4 to 6 hours of outside preparation by students, depending on their level of understanding of financial statements. This case describes the lending relationship between an independent car dealership and a community bank. It describes a series of loan renewals and credit requests over a three year time period.