Limitations Of The Analysis. On The Commercial Bank Lending In Corporate Solvency And Improvements

This thesis discussed limitations of repayment capability's analysis in Chinesecommercial banks and considers some methods to solve these limitations.In first chapter, this thesis briefly introduced the types of Chinese commercialbanks' businesses. Then expatiating the importance of loan business in Chinesecommercial banks from the view of profit structures. By the three differences betweenfinancial analysis and other risks analysis, which included financial analysis reflectedthe development of a corporation, confirmed the operating situation of a corporationand helped banks to realize the place of a corporation in its industry, this thesisshowed the reasons why financial analysis become an important aspect in eachcommercial bank before they release each loan to the borrower. In the second chapter,this thesis showed the two aspects which are included in repayment capability ratios:one is the ratios could reflect the liquidity situation of a corporation, the other is theratios could reflect the long-term repayment capability of a corporation. Then, thisthesis considered four limitations about repayment capability: analysis of repaymentcapability does not base on the sustain operation of a corporation, does not correctlydifferentiate the source of capital of a corporation, does not be a dynamic analysis,and does not put importance of interest repayment as the same level as the capital. Inchapter 3, this thesis put forward 3 methods to solve these limitations and proved theresults and effects of these methods by table ,formulas and examples.