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Working Capital CalculationA company has two kinds of assets namely fixed assets, such as property and machinery, and current assets.
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In the near term, foreclosures remain a pressing concern. As Kathleen Sowa, National Business Credit Executive at Bank of America, put it, “I think we need to get the foreclosures behind us…e still have a lot of people…that can’t… afford to be in their homes…etting that problem behind us is very important for small business to move forward. ” Mr. Bell agreed and called for a mechanism to clear distressed real estate: “There is a huge unrealized and unaddressed loan loss imbedded in the banking community from real estate…If we want to get the stuff out of the system…you’ve got to create type structure. ” In addition, FDIC Chairman Bair acknowledged ongoing efforts to restore the securitization market, which will take some time to heal: “ trying to come up with better standards to bring the securitization market back in a way that will appropriately align economic incentives and ensure high quality and transparency for investors buying those securities. But I think that’s going to take a while to do. ” For the longer term, Federal Reserve Chairman Bernanke identified the need to reform the government role in housing finance: “Obviously, the biggest problem…will be the Fannie and Freddie reforms which…will be critical to reestablishing the soundness of the residential mortgage market. ” Ensuring Credit is Available to Creditworthy Borrowers Lenders’ willingness to supply credit to small businesses was another key topic. Federal Reserve Chairman Bernanke noted early signs of improving sentiment among small business lenders: “t’s certainly still a very tight situation. But I think things have stopped getting worse and are looking a little better. ” Banks naturally tightened their lending standards as a result of the recession.