TAKE YOUR

BUSINESS FURTHER

FINANCIAL MAGAZINE

UNIVERSIDAD AUTÓNOMA DE NUEVO LEÓN

Facultad de Contaduría Pública y Administración

School of Business

Team:

Jessica M. Ramirez Gomez 1591768

Ruth Paola Meza Arredondo 1589305

Lizeth Garza González 1580866

Adrian Roberto Reyna Flores 1592397

Viviana de la Garza Gutiérrez 1582002

America Sarai Arreaga Garza 1580926

Group: 4Fi

Professor: Reynol Villarreal

April 30th, 2015

Cd. Universitaria de Nuevo León

Fo

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1. FINANCIAL RATIOS…………………………………………. 1

2. A.R. CREDIT MANAGEMENT

Dun & Bradstreet………………………………………… 6

Emma Score……………………………………………….. 7

Paydex……………………………………………………….. 8

D&B rating…………………………………………………. 9

Credit Hold………………………………………………… 11

3. BANKRUPTCY………………………………………………….. 15

4. MEXICAN FINANCIAL SYSTEM

Conducef……………………………………………………. 19

Banco de México…………………………………………. 21

Bolsa Mexicana de Valores/Afores………………… 24

Marketable Securities………………………………….. 28

LIBOR vs TIIE……………………………………………. 29

5. CONCLUSIONS………………………………………………… 30

6. REFERENCES…………………………………………………… 33

1. FINANCIAL RATIOS…………………………………………. 1

2. A.R. CREDIT MANAGEMENT

Dun & Bradstreet……………………………………….. 6

Emma Score………………………………………………. 7

Paydex……………………………………………………….. 8

D&B rating…………………………………………………. 9

Credit Hold………………………………………………… 11

Credit Terms………………………………………………. 13

3. BANKRUPTCY………………………………………………….. 15

4. MEXICAN FINANCIAL SYSTEM

Conducef……………………………………………………. 19

Banco de México…………………………………………. 21

Bolsa Mexicana de Valores/Afores…………………

24

Marketable Securities………………………………….. 28

LIBOR vs TIIE……………………………………………. 29

5. CONCLUSIONS………………………………………………… 30

6. REFERENCES…………………………………………………… 33

Example of Common size ratios from the Balance Sheet

FINANCIAL

RATIOS

?

Why Use

Financial

Ratio Analysis

Each of the items on the income statement

would be calculated as a percentage of

total sales. (Divide each line item by total

sales, and then multiply each one by 100 to

turn it into a percentage.) Similarly, items

on the balance sheet would be calculated

as percentages of total assets (or total

liabilities plus owners’ equity).

Types of Ratios

One of the most useful ways for the owner of a small

business to look at the company’s financial

statements is by using “common size” ratios.

Common size ratios can be

developed from both balance sheet and

income statement items. It is just calculated

each line item on the statement as a

percentage of the total.

The use of financial ratios is a time-tested

method of analyzing a business. Wall

Street investment firms, bank loan officers

and knowledgeable business owners all

use financial ratio analysis to learn more

about a company’s current financial health

as well as its potential.

FINANCIAL RATIOS 1

Debt to equity ratio is a financial, liquidity ratio that compares a company's total debt to total equity.

The debt to equity ratio shows the percentage of company financing that comes from creditors and investors.

A higher debt to equity ratio indicates that more creditor financing (bank loans) is used than investor

financing (shareholders).

Example:

Emily Ltd has the following

information:

Trade debtors $100,000

Trade creditors $80,000

Credit sales $300,000

Credit purchases $120,00

Cost of sales $70,000

Opening stock $60,000

Closing stock $20,000

Bank $66,000

Calculate the relevant Efficiency

Ratios.

Solution:

Average Collection Period = (100,000 / 300,000) *

365 = 121.7 days

Average Payment Period = (80,000 / 120,000) * 365

= 243.3 days

Current Asset Turnover = 70,000 / (100,000 +

20,000 + 66,000) = 0.38

Average stock = (60,000 + 20,000) / 2 = $40,000

Stock Turnover Period = (40,000 / 70,000) * 365 =

208.6 days

Cash Cycle = 208.6 + 121.7 - 243.3 = 87 days

Example

Assume a company has $100,000

of bank lines of credit and a

$500,000 mortgage on its property.

The shareholders of the company

have invested $1.2 million. Here is

how you calculate the debt to

equity ratio.

FINANCIAL RATIOS 2

Efficiency Ratios. Two common efficiency ratios are inventory turnover and receivables turnover.

Inventory turnover is the ratio of cost of goods sold to inventory. A high inventory turnover ratio means

that the company is successful in converting its inventory into sales. The receivables turnover ratio is the

ratio of credit sales to accounts receivable, which tracks outstanding credit sales. A high accounts

receivable turnover means that the company is successful in collecting its outstanding credit balances.

Formulas:

1) Average Collection Period = (Average Trade

Debtors / Credit Sales) * No. of Days

2) Average Payment Period = (Average Trade

Creditors / Credit Purchases) * No. of Days

3) Inventory Turnover Ratio = Cost of goods sold /

Average inventory held

4) Debtors Turnover Ratio = Net Credit Sales /

Average Trade Debtors

5) Total Assets Turnover = Net Sales / Total Assets

6) Degree of Operating Leverage = % change in

EBIT / % change in Sales

7) Creditors Turnover Ratio = Net Credit Purchases /

Average Payable

8) Days Sales Outstanding Ratio = Accounts

Receivable / Average sales per day

9) Working capital turnover Ratio = Cost of sales /

Average net working capital

10) Current Asset Turnover Ratio = Cost of goods

sold / Current assets

11) Stock Turnover Period = (Average stock / Cost of

goods sold) * No. of Days

12) Cash Cycle = Stock Turnover Period + Average

Collection Period - Average Payment Period

Profitability ratios indicate management's ability to convert sales dollars into profits and

cash flow. The common ratios are gross margin, operating margin and net income margin. The gross

margin is the ratio of gross profits to sales. The gross profit is equal to sales minus cost of goods

sold. The operating margin is the ratio of operating profits to sales and net income margin is the ratio

of net income to sales. The operating profit is equal to the gross profit minus operating expenses,

while the net income is equal to the operating profit minus interest and taxes. The return-on-asset

ratio, which is the ratio of net income to total assets, measures a company's effectiveness in

deploying its assets to generate profits. The return-on-investment ratio, which is the ratio of net

income to shareholders' equity, indicates a company's ability to generate a return for its owners.

FINANCIAL RATIOS 3

Operating ratios There are many types of ratios you can use to

measure the efficiency of your company’s

operations. In this section we will look at seven

that are commonly used and compared. There

may be others which are common to a specific

industry or that you will create for a specific

purpose within your company. These “efficiency

ratios” utilize data from both the Balance Sheet

and the Profit & Loss Statement.

The eight ratios we will cover are:

• Inventory Turnover Ratio

• Inventory Days on Hand

• Accounts Receivable Turnover Ratio

• Accounts Receivable Days on Hand

• Accounts Payable Turnover

• Accounts Payable Days

• Cash Cycle

• Return on Assets

Example of one tipe of Operating Ratios:

Inventory Turnover Ratio

To calculate the ratio we use the formula:

Inventory Turnover Ratio = Cost of Goods Sold /

Total Inventory

From the Roots Up Company has an Inventory

Turnover Ratio of:

$4,895,000 / $896,000 = 5.463

(From the Roots Up Company has “Other

Inventory” on the Balance Sheet. This figure is

excluded from the calculation, as it is not

considered operating inventory.)

Solvency ratios measure the stability of a company and its ability to repay debt. These ratios

are of particular interest to bank loan officers. They should be of interest to you, too, since solvency

ratios give a strong indication of the financial health and viability of your business. We will look at

the following solvency ratios: • Debt-to-Worth Ratio • Working Capital • Net Sales to Working Capital

• Z-Score

Example of one type of Solvency Ratio: Working Capital Working

Lenders use it to evaluate a company’s ability to weather hard times. Loan agreements often specify that

the borrower must maintain a specified level of working capital.

Working capital is computed as follows: Working Capital = Total Current Assets - Total Current Liabilities

Using the balance sheet data for the From the Roots Up Company, we can compute the working capital

amount for the company. From the Roots Up Company working capital: $2,463,000 - $773,000 =

$1,690,000 From the Roots Up Company has $1,690,000 in working capital.

FINANCIAL RATIOS 4

Liquidity ratios measure your

company’s ability to cover its expenses. The

two most common liquidity ratios are the

current ratio and the quick ratio. Both are

based on balance sheet items

Current Ratio

The current ratio is a reflection of financial strength. It

is the number of times a company’s current assets

exceed its current liabilities, which is an indication of

the solvency of the business.

The formula to compute the current ratio is: Current

Ratio = Total current assets / Total current liabilities

Using the earlier balance sheet data for the fictional

From the Roots Up Company, we can compute the

company’s current ratio. From the Roots Up

Company Current Ratio: $2,463,000 / $773,000 =

3.19 This tells the owners of the From the Roots Up

Company that current liabilities are covered by

current assets 3.19 times. The current ratio answers

the question, “Does the business have enough

current assets to meet the payment schedule of

current liabilities with a margin of safety?”

Quick Ratio

The quick ratio is also called the “acid test”

ratio. That’s because the quick ratio looks

only at a company’s most liquid assets and

compares them to current liabilities.

The quick ratio tests whether a business

can meet its obligations even if adverse

conditions occur.

Here is the formula for the quick ratio: Quick

Ratio = (Total Current Assets - Total

Inventory) / Total Current Liabilities

Assets considered to be “quick” assets

include cash, stocks and bonds, and

accounts receivable. In other words, all of

the current assets on the balance sheet

except inventory.

Example of Common size ratios from the Income

Statement

FINANCIAL RATIOS 5

Dun and Bradstreet

arose answering to the need of the

merchants of the East of the USA of

evaluate their potential clients, who

were going spreading towards the

West of the country. Already in this

moment, in the USA, there was

detected the need to possess quality

information to take quality decisions.

This is how D&B turned into a key

actor into the economic development

of the USA.

Dun & Bradstreet (D&B) grows the

most valuable relationships in

business. By uncovering truth and

meaning from data, they connect

customers with the prospects,

suppliers, clients and partners that

matter most, and have since 1841.

Nearly ninety percent of the Fortune

500, and companies of every size

around the world, rely on their data,

insights and analytics.

It is the world leader in providing

commercial information to the areas of

credit, marketing, purchasing,

collection management and support

services areas. Dun & Bradstreet

information supports decision-making

that are taken every day on day in the

world of the businesses.

In the business-to-business

marketplace, Dun & Bradstreet is the

indispensable source of content;

information-management expertise

and business insight that customers

need to make more informed decisions

and build profitable relationships.

The database of Dun & Bradstreet

covers more than 220 million

businesses in over 200 countries.

The long path of more than 150 years

in the world, has allowed D&B to

crystallize strong bonds with the

different sources of information:

companies, banks, public offices,

public records, associations, etc…

This experience has been capitalized

for D&B and overturned in

developments of efficient

methodologies of compilation, update,

processing and transmission of

information towards the client, always

orientated to covering with the aims of

the clients.

AR CREDIT MANAGEMENT

6

D&B EMMA SCORE

EMMA SCORE (Emerging Market

Mediation Alert Score) is a model of

evaluation of risk developed for

countries on emergent markets. It is a

punctuation developed with statistical

profile approach of information, which

predicts the possibility that a business

should be in risky condition of

instability or distrust, that is to say that

has problems of paying the debts

during 12 months and that finally stops

paying.

Emerging markets do not have the

pairings of trade behavior data and

actual bankruptcy filings to pass D&B’s

criteria for a standard delinquency or

failure score. The EMMA score

acknowledges that there are pockets

of an emerging market’s database that

are deserving of a risk score sooner,

because such businesses are more

popular as global suppliers and

customers.

In addition, the Emerging Market

Mediation Alert (EMMA) score

provides a standard risk indicator

across emerging markets where the

conditions indicating risk may be

different to more developed

economies.

The EMMA Score (Entry Market

Mediation Alert) is based on a scale of

1 to 10 where 1 represents the lowest

risk and 10 the highest risk of default

A one digit number from 0 to 5

assigned to the business based on

information in D&Bss file. The higher

the EMMA class score, the greater the

likelihood that the organization will

have late payments or business

failure.

EMMA Score Application

Low EMMA Score - May proceed to

process the applicant quickly with

minimal or no manual review

depending on the extent of score

validation analysis.

Medium EMMA Score (Medium

Risk Scores). Recommend a

manual review of the applicant

based on the applicant's capacity,

the internal policy and risk

tolerance.

High EMMA Score (High Risk

Scores). Requires thorough manual

review of potential decline, or

approval depending on the

applicant's capacity, the internal

policy and risk tolerance.

AR CREDIT MANAGEMENT 7

The D&B PAYDEX is a unique,

dollar weighted indicator of a

business's payment performance

based on the total number of payment

experiences in D&B's file. The D&B

PAYDEX ranges from 1 to 100, with

higher scores indicating better

payment performance. It reflects the

payment habits of a company,

showing how punctual a company is in

its payments. If a company breaches

payment deadlines, the Paydex index

falls continuously by the number of

days in default.

Payment experiences are gathered by

D&B from suppliers and vendors this

firm does business with. Each

experience reflects a different supplier

and reflects how bills are met within

relation to the terms granted. Up to 875

payment experiences are used to

generate the PAYDEX Score and up to

80 representative payment

experiences are reported in the credit

report.

80-100: Low Risk of late payment

(averages prompt to 30 days within

terms)

50-79: Medium Risk of late payment

(averages 30 or less beyond terms)

0-49: High risk of late payment

(averages 30 to 120 days beyond

terms)

Paydex gives an objective basis to

make decisions on setting credit lines

and terms. Paydex is one of the factors

that come into play in calculating D&B

Scores, which enable predictions on

bad-debt risk.

Suppliers, banks, lessors, landlords,

and customers all use the PAYDEX

for:

Determinate interest rates and

insurance premiums

To decide if an account should be

forwarded for 3rd party collection

Determinate whether to accept a

sale, set terms, or reject an account

PAYDEX

SCORE

8 AR CREDIT MANAGEMENT

D&B RATING

• Financial strength

• Based on Tangible NetWorth from the latestfinancial accounts

2A

• Risk Indicator

• Derived from the DBFailure Score but alsoconsiderate expert rulesand overrides

4

he DB Rating can help

you quickly assess a firm's

size and composite credit

appraisal, based on

information in a company's interim or

fiscal balance sheet and an overall

evaluation of the firm's

creditworthiness

This helps you to drive growth and

increase profitability by:

Allowing automated decisions for

increased efficiency

Enabling more consistent

decisions across the entire

organization

Applying scores across an entire

portfolio to quickly identify risk and

opportunity

Allowing faster processing of large

volumes of transactions

The DB Rating is made up of two parts

and presented in the following format:

T

9 AR CREDIT MANAGEMENT

The US 5A to HH

ratings reflect company

size based on net

worth or equity as

computed by Dun &

Bradstreet. These

ratings are assigned to

businesses that have

supplied Dun &

Bradstreet with current

financial information.

The 1R and 2R ratings

categories reflect

company size based

on the total number of

employees for the

business. They are

assigned to business

files that do not contain

a current financial

statement. For 5A to

HH Ratings, the

Composite Credit

Appraisal is a number

between 1 and 4 that

makes up the second

half of the company's

Rating and reflects an

overall assessment of

creditworthiness. Our

creditworthiness

assessment is based

on both payments and

financial stability. In 1R

and 2R Ratings, the 2,

3, or 4 creditworthiness

indicator is based on

analysis by Dun &

Bradstreet of public

filings, trade payments,

business age and other

important factors. 2 is

the highest Composite

Credit Appraisal a

company not supplying

Dun & Bradstreet with

current financial

information can

receive.

Rating Classification Composite Credit Appraisal

(Based on Worth from Interim or Fiscal Balance Sheet)

High Good Fair Limited

5A $50,000,000 and over 1 2 3 4

4A 10,000,000 to 49,999,999 1 2 3 4

3A 1,000,000 to 9,999,999 1 2 3 4

2A 750,000 to 999,999 1 2 3 4

1A 500,000 to 749,999 1 2 3 4

BA 300,000 to 499,999 1 2 3 4

BB 200,000 to 299,999 1 2 3 4

CB 125,000 to 199,999 1 2 3 4

CC 75,000 to 124,999 1 2 3 4

DC 50,000 to 74,999 1 2 3 4

DD 35,000 to 49,999 1 2 3 4

EE 20,000 to 34,999 1 2 3 4

FF 10,000 to 19,999 1 2 3 4

GG 5,000 to 9,999 1 2 3 4

HH up to 4,999 1 2 3 4

Rating Classification Composite Credit Appraisal

Based on Number of Employees)

Good Fair Limited

1R 10 and over 2 3 4

2R 1 to 9 2 3 4

INV. Indicates that Dun & Bradstreet is

currently conducting an investigation to

gather information for a new report.

DS. Indicates that the information

available does not permit Dun &

Bradstreet to classify the company within

our rating key.

-- (blank). The blank symbol means that

the information available to Dun &

Bradstreet does not permit us to classify

the company within our rating key and that

further enquiry should be made before

reaching a decision. Some reasons for

using a "-" symbol include: deficit net

worth, bankruptcy proceedings, lack of

insufficient payment information, or

incomplete history information.

ER. Certain lines of business do not lend

themselves to classification under the

D&B Rating system. Instead, we assign

these types of businesses an Employee

range symbol based on the number of

people employed.

NQ Not Quoted. This is generally

assigned when a business has been

confirmed as no longer active at the

location, or when D&B is unable to confirm

active operations. Alt

ern

ati

ve

Rati

ngs

AR CREDIT MANAGEMENT

10

Cash flow can either

make or break an

operation. Although

it's obvious that the

most important way

to manage an

organizations' cash

flow is its ability to

collect on open

invoices, managing

which customer

should be extended

what credit and which

should be extended

no credit at all, are

mutually important.

There may be the

unfortunate situation

that you decide to

place an entire account

on credit hold. The

most common situation

though, is the need for

the software to

determine if an order

should be placed on

automatic credit hold.

This would allow the

credit manager time to

investigate whether to

“force” the release of

the order or to contact

the account and notify

them of the situation.

To start, designate a

flag in your customer

master file that will

control whether the

customer should even

be subject to having

their orders placed on

credit hold evaluation.

You may decide to

categorize your best

and most important

customers to never be

placed on an account

hold and having a flag

to control this is very

important.

Next, designate a flag

to control the logic of

placing accounts on

credit hold under one of

the following situations:

Is the account over

their credit limit?

Is the account past

due?

Both

CREDIT HOLD When a customer is consistently late in making

payments, has exceeded their credit limit, or is

identified as a bad risk, you can prevent additional

credit purchases by placing their account on credit

hold. When a customer account is placed on credit

hold, you cannot create new sales orders for that

customer. However, you can still create transactions

for that customer in Receivables.

Managin

g y

our c

ostu

mers’ credit

hold

sit

uation

AR CREDIT MANAGEMENT 11

This means that if the

account is coded as

logic 1, their orders will

be placed on credit

hold if they are over

their credit limit. Logic 2

will place their orders

on hold if they are past

due, and logic 3 if either

one is true.

Next, identify the dollar

amount each one of

your customers will

have as their credit

limit. As orders are

being processed in

your system, have your

system

instantaneously check

the order amount

against the available

credit balance which is

calculated by simply

subtracting the amount

currently due on the

account (accounts

receivable open

amount) from the credit

limit.

It is critical that your

software notify your

staff when orders are

placed on credit hold

and the reason why.

This way your staff can

properly communicate

the situation with the

customer and take

immediate action as

necessary while

properly protecting

your assets.

Once an order is

placed on credit hold, it

immediately appears

on the credit manager

evaluation screen. This

screen should provide

your credit manager

with immediate access

to information that

enables them to make

decisions and take

immediate action.

Armed with all this

information, it is the

credit manager's ability

to either deny the

customer the order or

allow it to go through.

How they chose to do

it, is walking the

balance of protecting

the organizations

assets or building

customers for life.

Managin

g y

our c

ostu

mers’ credit

hold

sit

uation

AR CREDIT MANAGEMENT 12

he credit terms offered to

customers for early payment

need to be sufficiently lucrative

for them to want to pay early, but not

so lucrative that the seller is effectively

paying an inordinately high interest

rate for the use of the money that it is

receiving early.

The term structure used for credit

terms is to first state the number of

days you are giving customers from

the invoice date in which to take

advantage of the early payment credit

terms.

For example, if a customer is

supposed to pay within 10 days

without any discount, the terms are

"net 10 days," whereas if the customer

must pay within 10 days to qualify for

a 2% discount, the terms are "2/10". To

expand upon the last example, if the

customer must pay within 10 days to

obtain a 2% discount, or can make a

normal payment in 30 days, then the

terms are stated as "2/10 net 30".

The concept of credit terms can be

broadened to include the entire

arrangement under which payments

are made, rather than just the terms

associated with early payments. If so,

the following topics are included within

the credit terms:

The amount of credit extended

to the customer

The time period within which

payments must be made by the

customer

Early payment discount terms

The penalty to be charged if

payments are late

T

Credit Terms

Explanation Effective Interest

Net 10 Pay in 10 days None

Net 30 Pay in 30 days None

Net EOM 10

Pay within 10 days of month-end None

1/10 Net 30

Take 1% discount if pay in 10 days, otherwise pay in 30 days

18.2%

2/10 Net 30

Take 2% discount if pay in 10 days, otherwise pay in 30 days

36.7%

1/10 Net 60

Take 1% discount if pay in 10 days, otherwise pay in 60 days

7.3%

2/10 Net 60

Take 2% discount if pay in 10 days, otherwise pay in 60 days

14.7%

CREDIT

TERMS

Credit terms are the payment requirements stated on

an invoice. It is fairly common for sellers to offer early

payment terms to their customers in order to

accelerate the flow of inbound cash. This is especially

common for cash-strapped businesses, or those that

have no backup line of credit to absorb any short-term

cash shortfalls.

AR CREDIT MANAGEMENT

13

You should be aware of the formula for

determining the effective interest rate

that you are offering customers

through your early payment discount

terms. The formula steps are:

1. Calculate the difference

between the payment date for those

taking the early payment discount, and

the date when payment is normally

due, and divide it into 360 days. For

example, under 2/10 net 30 terms, use

this number to annualize the interest

rate calculated in the next step.

2. Subtract the discount

percentage from 100% and divide the

result into the discount percentage.

For example, under 2/10 net 30 terms,

you would divide 2% by 98% to arrive

at 0.0204. This is the interest rate

being offered through the credit terms.

3. Multiply the result of both

calculations together to obtain the

annualized interest rate. To conclude

the example, you would multiply 18 by

0.0204 to arrive at an effective

annualized interest rate of 36.72%.

Thus, the full calculation for the cost of

credit is:

Discount %

(1-Discount %) x

360

(Payment days-Discount days)

Cost of Credit

AR CREDIT MANAGEMENT 14

ankruptcy; to start talking

about this financial state

we first going to define the

word. A legal proceeding involving a

person or business that is unable to

repay outstanding debts. The

bankruptcy process begins with a

petition filed by the debtor (most

common) or on behalf of creditors (less

common). All of the debtor's assets are

measured and evaluated, whereupon

the assets are used to repay a portion

of outstanding debt.

Bankruptcy offers an individual or

business a chance to start fresh by

forgiving debts that simply can't be

paid while offering creditors a chance

to obtain some measure of repayment

based on what assets are available.

Bankruptcy filings in the United States

can fall under one of several chapters

of the Bankruptcy Code, such as

Chapter 7, Chapter 11 and Chapter 13.

Chapter 7 bankruptcy is a liquidation

proceeding in which the debtor's non-

exempt assets, if any, are sold by the

Chapter 7 trustee and the proceeds

distributed to creditors according to the

priorities established in the Code. The

case is begun by filing the official

petition, schedules and statement of

financial affairs. These forms prompt

you to list all of your assets and all of

your debts, along with some recent

financial history. This is the most

important and most time consuming

part of a bankruptcy filing. It is

important that every creditor is listed in

the schedules with an

accurate mailing address.

You must list all of your

debts, even if the debt is

non dischargeable or if you

intend to reaffirm the debt.

The schedules also list your

property, any debts secured

by that property, and the

B

Bankruptcy? Which exit to

choose?

BANKRUPTCY

15

sale value of the property. "Property"

here means "assets" or "possessions",

not just real estate.

Chapter 7 bankruptcy protection

allows debtors to get rid of most of their

debts and start over with a clean slate.

But it also has its drawbacks, including

the loss of property and a depressed

consumer credit score.

Chapter 11 is a form of bankruptcy

that involves a reorganization of a

debtor's business affairs and assets. It

is generally filed by corporations which

require time to restructure their debts.

Chapter 11 is an option of bankruptcy

for small business. Generally, small

businesses shy away from Chapter 11,

because it is expensive, risky, time-

consuming, and complex. Chapter 11

is the only bankruptcy option,

however, for a small business seeking

to restructure and continue in

operation if it is owned by a

partnership, limited liability company,

or corporation. Chapter 11 is also the

only bankruptcy option for individual

business debtors who want to

reorganize but owe too much money to

meet Chapter 13’s eligibility

requirements.

Under Chapter 11, a debtor can

restructure its finances through a plan

of reorganization approved by the

bankruptcy court. By reducing

obligations and modifying payment

terms, a Chapter 11 plan can help a

debtor balance its income and

BANKRUPTCY 16

expenses, regain profitability, and

continue in operation. Under Chapter

11, a debtor also can sell some or all

of its assets so it can downsize its

business if necessary or pay down

claims that it owes.

Another type of bankruptcy option is

Chapter 13. Chapter 13 can be a

restructuring option for small

businesses owned and operated by

individuals (that is, sole

proprietorships). Only individuals may

file Chapter 13, so it is not an option for

businesses operated through

partnerships, limited liability

companies, or corporations. Chapter

13 eligibility is also subject to debt

limits. Currently, an individual cannot

file Chapter 13 if he or she owes more

than $383,175 in unsecured debt or

$1,149,525 in secured debt.

A U.S. bankruptcy proceeding in which

the debtor undertakes a reorganization

of his or her finances under the

supervision and approval of the courts.

As part of the

reorganization, the debtor

must submit and follow

through with a plan to repay

outstanding creditors within

three to five years. In most

circumstances, the

repayment plan must

provide a substantial

payback to creditors - at

least equal to what they

would receive under other

forms of bankruptcy - and it must, if

needed, use 100% of the debtor's

income for repayment. Chapter 13

bankruptcy differs from the outright

foreclosure of an individual's or

business's assets (seen in Chapter 7

bankruptcy) and the expensive and

complicated restructuring of debts

seen in Chapter 11 bankruptcy.

Essentially, Chapter 13 allows a debt-

laden person or sole proprietorship

that still has significant income to

submit an orderly plan to the courts to

BANKRUPTCY 17

pay back debts over a few years.

Doing so can provide advantages to

the debtor not found in other forms of

bankruptcy, such as preventing the

foreclosure of a residence.

The options for bankruptcy that we

been analyzing are just valid for USA,

in the case of México there is a law

called Ley de Concursos Mercantiles

which is the one in charge of the

bankruptcy in this country. A case

under the LCM may be commenced by

(i) the debtor, (ii) a creditor or (iii) the

Attorney General (Ministerio Público).

Under the LCM, a debtor is deemed to

have "generally defaulted on its

payment obligations" if: (1) a payment

default has occurred with respect to

the claims of at least two creditors; (2)

payments are past due for more than

30 days and represent 35% or more of

all the debtor's payment obligations as

of the date of the filing; and/or (3) the

debtor does not have liquid assets

(e.g., cash deposits, short-term

securities, and accounts receivable) to

may at least 80% of the obligations

past due as of the date of the filing.

Under the LCM, eligibility is presumed

when the debtor does not have

sufficient assets to attach after a

default, there are no persons with

authority present, or where the court

determines that the debtor is

fraudulently conveying its assets to

avoid the payment of obligations.

In general, foreign companies may not

be subject to bankruptcy proceedings

in Mexico. The LCM, however, does

allow for the reorganization of

branches and subsidiaries of foreign

companies.

The LCM also permits the recognition

of foreign proceedings under "Titulo

XII," which like Chapter 15 of the U.S.

Bankruptcy Code is based on the

UNCITRAL Model Law on Cross-

Border Insolvency. Indeed, Mexico

was one of the first countries to adopt

the Model Law.

BANKRUPTCY 18

In collaboration with the Ministry of Finance and Public Credit, we have

prepared an informative article to learn more about this organization.

What is

CONDUSEF?

According to the

Secretariat of Finance and

Public Credit, the

CONDUSEF is dedicated to two types of

actions:

Preventive (guide, inform, promote financial

education) and Corrective (handle and resolve

complaints and claims by users of financial

services and products).

The CONDUSEF is committed to promoting

Financial Literacy among the population,

continue with the development of products

and tools to support, advise and guide users

of financial services, Always seek a fair and

equitable relationship between users and

financial institutions.

How to claim financial and

banking services?

On more than one occasion we go to the bank

and left with the same questions that we

walked in or even more and some additional

problem. At such times, it is normal to feel

unhappy and we have to redo queue so that we

again meet us and probably will again leave

unanswered again.

That is why there is the National Commission

for the Protection and Defense of Users of

Financial Services (CONDUSEF), which aims to

ensure the defense of the rights of banking

users as consumers.

MEXICAN FINANCIAL SYSTEM 19

Although the Condusef is an organ of defense,

the entity also controls sofoles, sofomes,

credit information companies, brokerage firms

and exchange,

investment and

savings, credit

unions,

insurance,

bonding and

Afore, among

other.

What can be claimed in

CONDUSEF?

The CONDUSEF answers questions related to

all types of financial products and services

commercialized in the country, but it is

remarkable that only handled claims on

product characteristics, the shape of the

operation, on the treatment of employees and

commitments the parts.

You can claim credit and debit cards, free of

commission, commission checks with

insufficient funds checks, as well as auto

insurance, medical expenses and life.

What cannot be claimed at

CONDUSEF?

In no way conflicts are handled due to the

costs involved in hiring a product or service,

as well as those relating to the interest rate.

Nor can claim matters relating to internal

policies of banks, provided they are not too

hardened.

How to make a claim on the

CONDUSEF?

There are numerous ways to contact the

CONDUSEF. It can be done through the Call

Centre (CAT) to the number 01800999 8080, toll

free from anywhere in the country for

information, advice and even initiate a

complaint or to 53,400,999, for the Federal

District and metropolitan area with the same

functions.

It can also be made by email to the email

asesoria@condusef.gob.mx or Headquarters

You can also make claims in the 32 regional

offices and three existing metropolitan

throughout Mexico.

What should be a claim to

the CONDUSEF?

Complaints to the National Commission for the

Protection and Defense of Financial Services

Users should indicate the name and registered

representative claimant or person, provided it

is a legal person or minor.

You must also enter a description of the

service that is requested and a brief statement

of the facts underlying the claim.

It is also essential that the letter provided the

name of the financial institution with which the

claim is made.

A copy of the documents certifying the reason

for the claim must always be attached.

Otherwise, CONDUSEF may reject your claim

as unfounded.

The claim is approved, it could arrive a

'Settlement Hearing "so we can solve your

problem with the financial institution.

MEXICAN FINANCIAL SYSTEM 20

“Our central bank”

The Bank of Mexico is our central bank and helps the financial system

of our country to develop healthily. The financial system is a set of institutions like banks, investment

companies, insurance companies, sofoles, brokerages, and other

more. These financial institutions facilitate the access of people and

businesses payment systems, ie, checks, credit cards and debit cards,

wire transfers and any other system through transfers which it was

money.

Imagine the amount of money paid

through the system payment within three

business days equal everything

produced in the country on a year. For a financial system works well it

is necessary that the payment systems are safe and efficient.

Located in the Mexico City, was founded on August 25, 1975 by then

President of our country, Mr. Plutarco Elias Calles and its main

objective is to achieve stability in the purchasing power of the national

currency.

The Bank of Mexico is the only institution that

can issue national currency for all transactions

in our economy are made.

Mexico is one of the few countries that

manufacture their own notes and coins. For

that there is the Banknote Factory and the

House of Currency.

The Bank of Mexico makes sure you have the

money needed to cover all needs without any

inflation; ie that prices of goods and services

no increase to the point where we can buy less

with the same amount of money. Care price

stability is one of the most important

responsibilities Bank of Mexico. A series of

measures that this institution applies anti-

inflation is called monetary policy.

The Bank of Mexico is not a commercial bank,

so that neither individuals, nor businesses can

open an account at the central bank.

As only grants loans to commercial banks is

said to be a bank of banks.

The Bank of Mexico, like most central banks

around the world, It is autonomous. This

means that the government cannot intervene

directly on how it is handled. This autonomy

prevents, for example, any authority to order

the bank to pay money or even issuing more

money than desirable

Bank of Mexico considers it important to

improve public understanding of what is and

what makes central banking in our country, in

particular regarding their action aimed at

maintaining price stability, ensure the healthy

development of the financial system, ensure

smooth operation of payment systems and

provide a means of secure and reliable

exchange so that people can realize their

economic transactions.

BANCO DE MEXICO INFORMATIVE ARTICLE

21 MEXICAN FINANCIAL SYSTEM

To a great extent, combating inflation has been

possible thanks to the institutional

foundations of the Central Bank.

There are 3 fundamental elements. The first

has to do with the primary objective of Bank of

Mexico, established by the Constitution, is to

ensure stability purchasing power of the

currency. This command leaves no doubts

about the basic orientation of the tasks of the

Bank of Mexico.

A second foundation is that, also by

constitutional provision, The Bank of Mexico is

autonomous in the exercise of their functions

and their administration. A third institutional

pillar is increasing transparency in the conduct

of monetary policy. Like any public body, the

Bank of Mexico is held accountable for the

performance of their duties. Furthermore, the

exercise of its powers and, in particular, the

determination of monetary policy, requires a

clear external communication.

To this effect, the Bank of Mexico produces

and disseminates statistics and research

papers. It also issues to meet requirements its

role as regulator. In terms of its objective

priority, the law obliges him to submit to the

Executive and the Legislative one statement on

monetary policy at the beginning of each year,

a report each semester on its implementation.

Moreover, since 1995 the Bank of Mexico

publishes its statement Weekly, which among

other things contains the level of the reserve

international as well as the main accounts of

its balance sheet, whose movements allow

knowing their market operations to meet

demand for money from the public. Since 2000

the Bank of Mexico reports a quarterly report

that explains the evolution of inflation and the

foundations of monetary policy

It must be remembered that central banks do

not determine prices, but these are the result

of the interaction of businesses and

consumers in the markets of different goods

and services. However, when the general level

of prices registered inflation continued growth

exists. Ultimately, inflation is a monetary

phenomenon, which corresponds to the

Central Bank guide expectations and price

formation in the economy through their actions

to control.

Since 2001 the Bank of Mexico formally applies

a strategy based on inflation targeting, which

means that monetary policy is "anchor" the

commitment of the Central Bank to apply its

tools to achieve the stated objectives. In the

monetary program that year the Bank of

Mexico established that the annual inflation

target is three percent from December 2003.

This rate is consistent with price stability, once

considered the upward bias indices

corresponding, which do not consider aspects

such as increases in product quality and

changes in consumption patterns.

How the Bank of Mexico seeks

to control inflation?

During the recent decade, Mexico

has made significant progress in

22

MEXICAN FINANCIAL SYSTEM 21

The target of three percent represents an

ongoing commitment. However, a variability

interval of plus or minus one percentage point

around this target is included, in order to

incorporate temporary deviations from factors

outside the scope of monetary policy, such as

highly volatile price fluctuations.

Since 2008 the Bank of Mexico expresses its

monetary policy stance using a benchmark

interest rate, which currently is the rate of

interbank overnight interest. With the changes

in this rate it seeks to influence on public

expectations and, through this and other

channels on the future inflation trends.

We know that the effects of monetary policy

occur with long and variable lags, so that

decisions in this area should be based

primarily on forecasts of the future and

therefore be preventive. The problem is that

nobody knows the future and therefore the

transmission channels of monetary policy may

have an uncertain impact.

Therefore, central banks take into account all

available information. Seek to identify inflation

pressures and nature are trying to distinguish

whether temporary or permanent, whether they

come from pressures of supply or aggregate

demand, and at what stage of the cycle the

economy is.

MEXICAN FINANCIAL SYSTEM 23

exico's only securities

market, the Mexican

Stock Exchange (in

Spanish, la Bolsa Mexicana de

Valores, or BMV) has its

headquarters in Mexico City.

Established in 1886 as the Mexican

Mercantile Exchange, it adopted its

current name in 1975 and is the

second-largest stock exchange in

Latin America (after Brazil). Its

trading system is fully electronic,

and its main index is the IPC.

The BMV is a private financial

entity, operating by concession

ofthe Secretariat of Finance and

Public Credit (Mexico) (SHCP by its

initials in Spanish), under Mexico's

Securities' Market Law, passed in

1933 with the creation of the

modern Mexican Stock Exchange.

The main purpose of the BMV is to

facilitate share transactions and to

push market development,

expansion, and competitiveness.

The BMV was officially

founded in its modern form

in 1933 along with the

passing of the Regulatory

Decree of the General Law of

Credit Institutions and

Auxiliary Organizations,

which deals on matters

relative to the trade of

securities within the country.

On August 26, 2014, BMV

became the 12th stock

exchange to join the United

Nations Sustainable Stock

Exchanges initiative.

M

Mexican Stock Exchange

MEXICAN FINANCIAL SYSTEM 24

The types of securities exchanged through the

BMV include stocks, debentures, government and

corporate bonds, warrants and other derivatives. Shares of initial public

offerings can be made available through the BMV. The Mexican Stock

Exchange's roles include facilitating securities trading, making securities

information available to the general public, promoting fair market practices,

ensuring transparency and contributing to the growth of jobs and the

economy in Mexico.

SECURITY

Most important companies

ST

RU

CT

UR

E

BMV is now a public company following its IPO in June 2008, and its shares are traded on the

BMV equities market. It operates by concession of the Secretariat of Finance and Public

Credit. Until its IPO BMV was owned by its members, which were a group of banks and

brokerage firms. The exchange trades debt instruments including Federal Treasury

certificates (CETES), Federal Government Development bonds (BONDES), and Investment Unit

bonds (UDIBONOS), Bankers acceptances, and promissory notes with yield payable at

maturity, commercial paper and development bank bonds. In addition, it also trades stocks,

debentures, mutual fund shares, and warrants. Trading is conducted electronically through

the BMV-SENTRA Equities System.

MEXICAN FINANCIAL SYSTEM 25

t's a Mexican

financial company

specialized in

managing and

investing the savings

for retirement and

voluntary safely,

millions of workers

affiliated to the

Mexican Social

Security Institute

(IMSS). Seeking the

best possible

performance during

the investment cycle

of resources.

Previously the

pension resources

workers affiliated to

the IMSS, were

administered by such

institution in one joint

account without

obtaining yields.

Subsequently the

AFORE (Retirement

Funds Administrators)

were created by the

Social Security Act

(LSS) in May 1996,

starting its operation

in 1997 with the aim

of providing personal

accounts of workers

and the savings

generated throughout

his working life, could

grow with the returns

generated.

Its operation is

authorized by the

Ministry of Finance

and Public Credit and

supervised by the

CONSAR (National

Commission System

Retirement Savings).

Since July 1997, the

AFORES manage the

savings of the IMSS

workers. From August

2005, offer their

services to all

Mexicans.

The salary he

receives is deducted

an amount which,

together with other

amount that your

employer contributes

and provides other

amount than the

government, a

savings fund (which is

their individual

accounts), which put it

to work is formed (as

invest) from day one

and will generate a

return to the worker.

Thus, gradually grows

saving for the future.

I

AFORE

HO

W D

OE

S IT

WO

RK

?

MEXICAN FINANCIAL SYSTEM 26

Providing information

material on the (SAR)

system.

Having a Specialized

Unit for Public

Attention to address

complaints and

grievances.

Perform resource

transfers SAR 92-97

to your individual

account.

Provide at least 2

statements annually.

Have an Investment

Company

Specialized in

Retirement Funds

(SIEFORE) through

which workers may

get better returns on

their savings and with

very little risk.

Through it the Afore

can receive and

process total and

partial withdrawals.

Keep track of the

resources for your

housing subaccount.

BENEFITS

1. You can improve the lives of retirees

2. Increase domestic savings

3. Increase productive investment

SIEFORE

The Siefore is the instrument by which the Afore invests

resources in the individual account of the worker to earn

higher returns. Siefores are supervised by CONSAR.

Your retirement savings will be deposited in the Siefore

that apply to you according to your age.

OT

HE

R F

UN

CIO

NS

MEXICAN FINANCIAL SYSTEM 27

In this comparative table are demonstrated the marketable securities of a specific type of bank:

Bancomer

MARKETABLE

SECURITIES

Marketable securities are very liquid as they

tend to have maturities of less than one year. Furthermore, the

rate at which these securities can be bought or sold has little

effect on their prices.

Examples of marketable securities include commercial paper,

banker's acceptances, Treasury bills and other money market

instruments.

MEXICAN FINANCIAL SYSTEM 28

Here, are represented the different interest in a short term debt till 1 year and

the different types of marketable securities that the bank has. Also, are settled

the minimum investments that the marketable securities has to contain.

LIBOR TIIE

1. LIBOR (London Interbank Offered Rate) is

the average interbank interest rate at

which a selection of banks on the London

money market are prepared to lend to one

another

2. LIBOR comes in 8 maturities (from

overnight to 12 months) and in 5 different

currencies. The official LIBOR interest

rates are announced once per working day

at around 11:45 a.m. In the past, the

BBA/ICE published LIBOR rates for 5

more currencies (Swedish krona, Danish

krone, Canadian dollar, Australian dollar

and New Zealand dollar) and 8 more

maturities (2 weeks, 4, 5, 7, 8, 9, 10 and

11 months).

3. LIBOR is watched closely by both

professionals and private individuals

because the LIBOR interest rate is used

as a base rate (benchmark) by banks and

other financial institutions

4. Rises and falls in the LIBOR interest rates

can therefore have consequences for the

interest rates on all sorts of banking

products such as savings accounts,

mortgages and loans

1. The TIIE (Tasa de Interés

Interbancaria de Equilibrio) is a

representative rate credit

transactions between banks.

2. The TIIE is calculated daily (for

periods 28, 91 and 182 days) by the

Banco de Mexico with quotes

submitted by banks through a

mechanism designed to reflect

conditions in the money market in

local currency.

3. The TIIE is used as a reference for

various instruments and financial

services such as credit card

products.

4. The interbank equilibrium interest

rate (TIIE) is determined by the

Bank of Mexico based on quotations

submitted by lending institutions,

with a start date of publication in the

Official Journal of the Federation.

5. TIIE is the parameter most

commonly used for daily operations

and loans as well as equity

placements, among other

operations.

LIBOR vs. TIIE

MEXICAN FINANCIAL SYSTEM 29

América

Saraí

Arreaga

Garza 1580926

Ruth Paola Meza Arredondo 1589305

Through the elaboration of this magazine we’ve discovering very important things about a matter

that is to crucial in business life which is finances. Some of the important topics that we discuss

here are important not just to business but also to daily life because besides as topics as the

different types of bankruptcy, that you can be when your business are not doing well in order to

can terminate your debts in the best way, we analyze some important financial institution of this

country named Mexico, some of them created to boost the whole Mexican economy as the Bolsa

Mexicana de Valores but others as the AFORE created to help the actual society and its economy

for its retirement to can have a better pension, another of this institutions is the CONDUSEF which

one of its objectives is to teach people about the importance of personal finance and the saving.

In this project we also discover important thing to enterprises like the D&B which work like a data

base for companies in order to reach its goals by making links between enterprises and scoring

them.

We also review how important are the financial ratios and the credit terms which are very important

for the companies because as we know a lot of what an enterprise buys is or would be in credit

for safety and because managing great quantities on cash is worthless for the companies.

Personally I think this is a very good work that can help the readers to learn in a more dynamic

way because we see a variety of topics that are related with each other.

"Take your business further" as we decided to name this magazine addresses the most important topics in

financial terms such as the financial ratios which are helpful to learn how to analyze the current financial situation

of any organization through these methods with the different types of ratios that the financial manager can use to

interpret the terms; also we found out that Dun & Bradstreet, an american network, is one of the most important

keys involved in the improvement of us economy by registering the credit situations of potential clients of any

business by divided them according to their credit score using the EMMA and PAYDEX score; it is important to

mention that also they rate their potential clients so they can know if the client is going to be able to pay the credit

on time or not. In this way they can prevent any financial risk and also determine which clients are better to keep

it on constant credit or if they are in the bad credit side to hold the credit according to its characteristics. Besides

of being a network, this is also a company that provides commercial information, the credit terms in which a

company can authorize the credit for the customers. Also, the magazine includes different chapters that we have

seen on class; and finally, at the end of the magazine we integrated the organizations and institutions involved in

the Mexican financial system emphasizing in practical information to understand in a better way how Finance is

being involved in the Mexican economy.

Nowadays, not only big and international known companies should have knowledge about the topics that I

mentioned above, but also PYMES in Mexico; the new entrepreneurs seem to have lack of knowledge about

some financial issues and that is why this magazine was created for, in this way we can promote the reader to

being interested in how Finance is going within our country so we can take advantage of any opportunity and

apply all the concepts and topics to our professional activities on a daily basis.

Financial magazines are helpful to any reader and specifically to the businessman as well

as the entrepreneur to take business decisions according to what is best for the company

involved. As we all know, businesses need to manage their capital and investments through

different methods and activities related to financial issues, the key to success is by analyzing

the options and opportunities to determine the optimum decision to take in order to maximize

the company's efficiency.

30

Jessica M.

Ramirez

Gomez 1591768

Lizeth Garza Gonzalez 1580866

In this project we integrate important topics covered during the semester. It was a very interactive way, we collect all the information and gave the form of a magazine.

We cover the issue of financial ratios which are explained where each of them and to use them, include a practical example for better understanding.

Then we followed with the subject of AR Credit Management which is the process of controlling and collecting payments from customer; as subtopic we talked about Dun and Bradstreet Credibility Corp which is the indispensable source of content; information-management expertise and business insight that customers need to make more informed decisions and build profitable relationships. Continue with this subtopic, we included the EMMA Score, Paydex, DB rating, credit holds and credit firms.

Moving with the next subject included in our magazine, we needed to talk about the Mexican Financial System, in here we included the informative articles about the CONDUSEF and the Bank of Mexico, also the AFORES and the Mexican Stock Exchange, as part of this subject we included the marketable securities as some examples of marketable securities include commercial paper, banker's acceptances, Treasury bills and other money market instruments, we made a chart explaining a little about how these works, also we compared the London Interbanck Offered Rate and the Tasa de Interes Interbancaria de Equilibrio, which works similar but the first is made and calculated in the UK and the second is smaller and is calculated in Mexico.

In conclusion, we tried to put in this project a summary of what’s was learned and saw through the forth semester in finance. We hope that you find this information useful.

The first one talks about the different types of Financial Ratios. What are their meaning, their application in a concise situation and an example of one of each to know what are their formulas and how they can be applied to have a financial perspective not only in practical exercises but their application in a corporation; having the financial ratios we can have an idea how much profitability a company has and give us a view of an time-tested analysis of it.

The next section includes the Accounts Receivable Management. This part of the magazine is about an analysis of “D&B (Dun & Bradsreet)” of a company. This concept provides commercial information to those areas of the company that are involved in the management of the company, the credit that they manage, the purchasing sections and the marketing of it. It talks about the importance of the “D&B” and the huge impact of it between the different international companies, There are included it rating and the interpretation of it. We talked about the credit hold and the steps that a customer has to follow to save as much money as they can and how to manage it.

In the third section we talked about the Bankruptcy in the financial analysis and the processes followed to avoid it. The types of bankruptcies and how it affects to the business, which one we can chose in order to not affect the company.

And in the final section of the financial magazine we talked about the Mexican Financial System. In general, there are included subjects like which is the financial system of Mexico, its economy and corporations that supports its finances.

Having a better perspective of the financial management and the economy and the financing systems applied in the real world made us understand better its results and impact in the economy, in the lives of the citizens and the importance of the general knowledge of it.

Also, we learned how to apply the different information and concepts that we saw in the class, which was even more interesting.

This final Financing Project consists in the elaboration of a financial magazine including different subjects that we learned in class. The purpose of this is to know how to apply the concepts seen in real life and having a bigger perspective of the financial analysis. The magazine is composed in 4 sections.

31

Viviana de

la Garza

Gutiérrez

1582002

Adrian Roberto Reyna Flores 1592397

Throughout the investigation that we realized in order to accomplish this magazine, we were able

to identify four main subjects of the finances that are very important to know, in order to be always

informed. Those four subjects were Financial Ratios, A.R Credit Management, Bankruptcy and

Mexican Financial System. These four subjects are primordial in the administration of a business,

because it is practically sure that at some time, they will happen inside the activities or plans of

the company.

In the research that we did as a team, we were able to investigate various important topics

on finance. Through this magazine, we have been able to explore the financial

opportunities, advantages and management strategies that can help us as an important

fact in our decision making in our lives. Really this magazine helps me to understand and

also expand my point of view of some financial subjects in every company.

In this magazine we develop on four important topics in finances; first we investigate more

about the financial ratios and is a useful tool for users of financial statement. One of its

advantages is that simplifies the financial statements and also helps in comparing

companies of different size with each other.

Then we investigate about the A.R. credit management that has so many subjects and

it’s divided by some credit hold and terms. After that we investigate about the bankruptcy,

is when the company know if the business there can work in a good way or that in some

moment the business will go down and literary broke.

And the last topic was the investigation about the Mexican stock exchange and the bank

of Mexico, that play an important role on Mexican economy, because the main function

is the establishment of a center for investment and relationship between savers and

investors looking to put their money to get an interesting performance and businesses

that need capital to invest in developing their businesses.

In the Financial Ratios, we were able to know that are the main methods to analyze a business. If a company

puts in practice the financial ratios, the financial statements will be simplified. Another advantage of the use of

financial ratios is that, for example, with the solvency ratio, a company can know the financial health and the

viability.

In the A.R Credit Management first, we investigate about the creation of the D&B(Dun & Bradstreet) that is a

company that provides commercial information to the areas of credit, marketing, purchasing and collection

management. This company provides data and it has plenty methods to help business in their status of the

companies. Some of those are the emma score, paydex and the DB rating. These support the decision making

day by day of businesses.

In the Bankruptcy, we were able to understand the process of how it works, how it starts, what problem

represents to the businesses with debts and the way those businesses can start again with no more debts.

And in the final subject that was the Mexican Financial System we summarize how the Finances work in Mexico.

We discover that the institutions of AFORE and Bolsa Mexicana de Valores are the main institutions that support

the Mexican economy.

From my point of view, the fulfillment of this financial magazine was important to us, because the topics that we

investigate are primordial in the world of the finance and in all the companies are present and if we can learn

since know what strategies to use, what methods to follow, in a future we won’t have problems to understand

it.

32

REFERENCES 1) Stanley & Geoffrey. Foundations of Financial Management. (11 ed.)

2) http://www.dnb.co.uk/solutions/risk-management-solutions/bad-credit-rating

3) http://www.forbes.com/sites/oracle/2015/03/27/dun-bradstreet-differentiates-itself-using-

data-and-customer-relationships/

4) https://developer.dnb.com/docs/2.0/assessment/3.0/emma

5) http://www.dbhun.hu/en/db-database/db-paydex

6) https://mycredit.dnb.com/glossaries/paydex-score/

7) http://www.dnb.com/company/our-data.html

8) http://www.dnb.co.uk/scores-data/dandb-rating

9) http://www.cbsoftware.com/cbnn/managing_your_customers_credit_hold_situation.php

10) http://www.accountingcoach.com/accounts-receivable-and-bad-debts-

expense/explanation/2

11) http://bankruptcy.findlaw.com/chapter-7.html

12) http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter7.aspx

13) http://www.chadbourne.com/files/Publication/acd0a6ce-0f40-4524-b065-

838e7e4c6cd5/Presentation/PublicationAttachment/e1660b75-8ce4-42e2-a88f-

8b0d1d1f5cdc/Mexican%20Bankruptcy%20Law%20Guide.pdf

14) http://tiie.com.mx/tiie-2015/

15) http://www.global-rates.com/interest-rates/libor/libor.asp

16) http://www.economia.com.mx/las_afore_y_su_funcionamiento.htm

17) http://www.condusef.gob.mx/index.php/instituciones-financieras/afore/3-comparativo-

siefores

18) http://www.amafore.org/%C2%BFc%C3%B3mo-funcionan-las-afores

19) http://www.profeco.gob.mx/encuesta/brujula/bruj_2013/bol248_Lo_que_debes_saber_s

obre_afores.asp

20) http://www.stockexchange.com.mx/

21) http://www.redalyc.org/pdf/267/26700822.pdf

22) http://www.wikinvest.com/wiki/Mexican_Stock_Exchange

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