By T. H. Donaldson (auth.)

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Naturally, all of this information should be supplemented by continual visits to the country, for banks which do not have a branch on the spot. Country offices at the IMF and the World Bank are usually willing to discuss informally their views of a country and its development. Central banks and foreign offices of major countries are also often well informed and willing to advise on the latest conditions and concerns, at least to their own banks. For all this, it remains true that even the statistics of developed countries vary in quality and are presented in different ways.

In particular the analysis of fixed assets indicates their ability to generate cash or absorb it in replacing them, which in turn says something about their likely value in liquidation. Operations provide the most important subject of a full going concern analysis, which should cover the last three to five years in as much detail as possible. It should consider changes in sales, in profits at various levels and in each major type of cost to assess the predictability, stability and sustainability of profit and cash flow.

Although interest is always important in pricing (and is often the only factor), other forms can be significant. They include compensating balances in the US, and commitment, management or facility fees everywhere. Some domestic markets charge fees for the availability of even uncommitted facilities. A commitment fee on the unused portion of any committed facility is, from the borrower's viewpoint, an insurance premium; it used to be charged at a standard V2 per cent, but competitive pressures have pushed it down to V4 per cent or less.

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