N.H. Admin. Code § Cdfa 310.15

Current through Register No. 50, December 12, 2024

Section Cdfa 310.15 - Financial Indicators

(a) Applications shall be awarded a maximum of 36 points for financial indicators on the basis of the following point values:

(1) A score of 2 points if a review of the documentation provided under (b) indicates a strength in the particular industry;

(2) A score of one point if a review of the documentation provided under (b) indicates that there is no effect in the particular industry; and

(3) A score of 0 points if a review of the documentation provided under (b) indicates a weakness in the particular industry.

(b) The point values listed in (a) shall be awarded for each of the following financial indicators:

(1) Days receivable which means the average number of days it takes the business to collect on its accounts receivable are nearly equal to payment terms;

(2) Days payable which means the average number of days it takes for the business to pay its suppliers are nearly equal to payment terms;

(3) Payables are less than inventory;

(4) Days accrual, which means the average number of days of expenses, exclusive of payables, a business has incurred during the period covered by the financial statement but not yet paid are nearly equal to the payroll cycle;

(5) Payment of taxes are current;

(6) Days inventory which means the average number of days worth of raw materials, work in process and finished goods held by the business are nearly equal to the inventory cycle;

(7) Status of notes receivable;

(8) Status of notes payable or subordinated officer debt;

(9) Evidence that officers debt is truly subordinated;

(10) Debt to equity ratio is reasonable;

(11) Positive retained earnings;

(12) Increase in sales;

(13) Stable ratio of cost of goods sold to sales;

(14) Sales and general administrative costs to sales ratio is stable;

(15) Officer compensation is reasonable;

(16) Operating profit to sales ratio is stable;

(17) Earnings before taxes to sales ratio is stable; and

(18) Expenses are controlled and determined at the discretion of the ownership of the business and are thereby available to be reduced to create more capacity to pay for additional debt.

(c) The expenses discussed in (b)(18) shall include, but not be limited to, the following:

(1) Officer compensation;

(2) Rent expense;

(3) Interest expense; and

(4) Depreciation expense.

(d) In order to address each of the financial indicators listed in (b), the applicant shall provide documentation including, at a minimum, the following:

(1) Financial statements of the business for a minimum of the past 3 years from the date of submittal of the application;

(2) Payment terms of the suppliers to the business;

(3) Payment terms of the business to its buyers;

(4) Current inventory;

(5) Payroll cycle;

(6) Inventory cycle;

(7) Aging of receivables;

(8) Balance due and payment terms of subordinated officer debt;

(9) Detailed listing of sales and general administrative costs; and

(10) Any other documentation that exists to provide the information needed to evaluate the financial indicators of a specific business.

N.H. Admin. Code § Cdfa 310.15

(See Revision Note at chapter heading for Cdfa 300) #8387, eff 6-29-05 (renumbered by #8515, from Cdfa 310.09 )