Credit analysis of potential customers of IBM Global Financing - Dissertation

Credit analysis of potential customers of IBM Global Financing - Current status appraisal and recommendations for future improvement - Dissertation Example Additionally, it has also hastened the credit approval process to a very short span which is inadequate to accurately arrive at a picture of the credit situation of the Company. This report examines the risks posed in the issue of credit and in financing arrangements, and also examines different kinds of credit models, applying them in the context of IBM Global, to examine its credit appraisal process and suggest recommendations to improve the efficacy of the credit rating process. CHAPTER ONE Aim and Objective of this Study: The recent financial crisis that has affected most of the world economies highlighted the grave problems that can arise when credit and financing arrangements are entered into indiscriminately, without a rigorous credit analysis system in place. IBM Global Financing is one arm of IBM that aids and assists credit worthy clients to develop a comprehensive investment strategy by offering them financing options for purchase of new IT equipment, or lease of equipment and other applications. This study proposes to examine the importance of assessing the risk of credit default risk and entering into a discussion of credit risk models, so that they can be applied in the context of the credit analysis process that is in use at IBM Global Financing. ... he IT systems that are already in existence at various organizations all around the world are legacy systems that are no longer optimum and effective in terms of functionality in a fast paced global environment. IBM Global Financing helps several corporations and businesses to acquire IT solutions that can help to meet the needs of the businesses in the most efficient and cost effective manner possible. It offers different kinds of financing options to address the unique needs of a particular organization and to help the said organizations to also manage their assets and cash flow as they carry on the process of improving and enhancing their IT systems. The Company does not merely offer It equipment at attractive financing rates, it also offers strategic financing for corporations to be able to survive in the current harsh economic climate that has plagued almost every region of the globe. The Company provides invaluable assistance to corporations in IT leveraging, commencing right f rom the beginning of the process when the decision is made to implement improved IT solutions. The corporations in questions are offered options to maximize their purchasing power, offered financial incentives and concessions as they implement and use the said systems and also in the disposal of IT systems when they are no longer effective or when they are upgraded by better systems. The clients of IBM Global Financing are aided in the process of making the right decisions. IBM Global Financing therefore offers short and long term loans, both for end customers as well as partnering options, offering financing on the basis of instalment payment plans, leasing options or through the use of factoring models, all of which are geared towards providing customers with a cost effective option to