Monro Muffler/Brake Analysis

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Monro Muffler/Brake | Credit Analysis | | Table of Contents Description of Requested Credit Facility 3 Executive Summary 3 Organization Description 3 Economic & Industry Forecast 6 External Factors 7 Highlights of the Financial Statements 8 Five Year Projections 13 Net Income and Cash Flow Projections 13 Credit Analysis/Ability to Meet Financial Obligations 14 Pricing the Credit Facility 15 * Description of Requested Credit Facility In anticipation of the expiration of its existing credit facility, Monro Muffler/Brake is requesting a five-year, $175 million revolving credit facility from Wells Fargo Bank. The company will use this credit facility to replace smaller existing facilities and use the additional funds for general company needs. As the largest chain of company operated under-car facilities in the U.S. , this credit facility will allow the company to continue to improve its financial position in the retail automotive service industry. * Executive Summary In determining the viability of the organization, the macro-economy, industry prospects, and the company itself are all thoroughly evaluated. The company’s financial statements from the past three years are analyzed in great detail and net income and net cash flow projections are completed for the next five years to gain a sense of the capability of the organization to repay the pending revolving credit facility. Monro has several factors that support the issue of a new credit facility, including a strong balance sheet position, favorable industry trends and its market leading position. It is a low cost operator and has offered dividend increases for 11 years straight. Furthermore, it is the largest chain of under-car facilities in the U.S., offering a considerable variety of products and services, which balance and meet the needs of a broad clientele. *

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