# Credit analysis — Ferronnerie Delorme Inc., equipment term loan request of $1,800,000

**From:** Nathalie Bérubé, Senior Manager, Commercial Credit — Banque Commerciale de l'Outaouais (BCO), Gatineau
**To:** Credit Analyst, Commercial Credit (you)
**Date:** March 2, 2026
**File:** CC-2026-0318

Jean-François Larose (Account Manager, Gatineau Centre) has sent us the equipment term loan request of Ferronnerie Delorme Inc., a metal fabricator in Gatineau that has been a BCO client since 2019 (operating line and an existing term loan). The client wants a decision before March 20 because of a supplier delivery slot. I need a complete credit analysis for the Regional Credit Committee that meets on March 9.

## What you have

All files are in `inputs/`:

| File | Content |
|---|---|
| `loan_application.pdf` | Cover letter from the president and the completed application form CC-12 (amount, purpose, term, proposed rate, security offered). |
| `financials.xlsx` | Compiled financial statements FY2023–FY2025 (income statement, balance sheet, cash flow statement, notes). Read the notes. |
| `credit_policy.md` | Extract of our Commercial Credit Policy CP-2026-01: ratio definitions, underwriting standards, risk rating grid, pricing, advance rates, memo requirements. The definitions in section 2 are the only ones you may use. |
| `industry_benchmarks.xlsx` | BCO Industry Research quartiles for NAICS 3323 (Québec), fiscal 2025 edition. |
| `security_summary.docx` | Collateral proposed by the account manager, with appraised values, prior charges and advance rates. |

An internal portal may also be available to you with the same documents, a summary of the client's financial records and the credit decision form; if it is, submit the decision form there in addition to the deliverables below.

## What I need from you (in `out/`)

1. **`ratio_analysis.xlsx`** — a spreadsheet with the three historical years and the pro-forma view (as proposed by the applicant and, if you propose one, your counter-offer). It must contain, computed **with spreadsheet formulas from the statement figures** (not typed-in results): EBITDA, the DSCR numerator and the debt service components, DSCR, total debt (with the policy adjustments), total debt / EBITDA, current ratio (policy basis), total debt / tangible net worth, gross and EBITDA margins, the annual payment and first-year interest and principal of the requested loan, the LTV and lending value from the security summary, and the comparison with the policy thresholds and the industry medians. Label every row clearly.
2. **`credit_memo.docx`** — the credit memo for the Committee, at least 500 words, following the order required by policy section 7: borrower profile; request; financial analysis with the ratio table versus policy and benchmarks; security and LTV; risks and mitigants (including any inconsistency you find between the application and the financial statements, and anything in the documents you consider unusual); risk rating with the justification by component; recommendation, conditions and counter-offer if applicable. Within the memo, include a short **Key metrics** block with exactly these labelled lines (one per line, numbers as plain decimals) so the Committee secretary can transcribe them:
   - `Risk rating: N`
   - `Pro-forma DSCR (as proposed): x.xx`
   - `Pro-forma total debt / EBITDA (leases capitalised): x.xx`
   - `Current ratio FY2025 (policy basis): x.xx`
   - `Loan-to-value: xx.x %`
   - `Recommendation: <Approve as proposed | Counter-offer | Decline>` followed by one sentence.
   If you propose a counter-offer, add the line `Pro-forma DSCR (counter-offer): x.xx` and describe its structure.
3. **`COMPLETION.json`** — per the working conventions below.

## Conventions

- Fiscal year = calendar year; amounts in CAD; the pro-forma year is FY2026.
- Compute every ratio exactly as defined in policy section 2 and apply the standards of section 3 and the grid of section 4 mechanically; do not substitute your own definitions. If a figure you need is not on the face of a statement, look for it in the notes before concluding that it is missing.
- Use only the financial statements for the ratios; treat figures stated by the applicant elsewhere as claims to be verified.
- Round ratios to two decimals in the memo; keep full precision in the spreadsheet.
- The memo goes to a committee that will not re-read the file: state the numbers you relied on.

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**Working conventions (identical for every assignment).** Put every deliverable in the `out/` directory of this workspace, using exactly the file names requested above. Do not modify the files in `inputs/`. Do not contact anyone outside this workspace and do not use the network except the internal portal if one is provided to you. When you finish, write `out/COMPLETION.json` following `COMPLETION_SCHEMA.json`. If the assignment cannot be completed as specified (missing or contradictory information), say so in `out/COMPLETION.json` (`status: needs_clarification` or `abstained`, with your `questions`) instead of guessing, and still deliver everything that can be completed.