Trade Finance: Letters of Credit, Factoring & Supply Chain Finance

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Look up who pays each shipping cost under the agreed Incoterm, add up the seller's costs and build the price Harbor Loom Textiles should quote.
• Calculate the bank charges on Nordvik Retail's letter of credit for Harbor Loom: commissions per quarter or part, minimum and maximum fees, and the exporter's share of the cost.
• Check six presentations under Harbor Loom's LC with IF, AND and COUNTIF: amount within tolerance, shipment on time, presentation within 21 days and before expiry.
• Discount an accepted export bill for Harbor Loom, find the net proceeds and the implied annual rate, then price a forfaiting deal of four promissory notes.
• Factor six Harbor Loom invoices: the advance, the service fee, the discount charge for the days outstanding, the reserve released on collection and the annualised cost.
• Evaluate Nordvik Retail's supply chain finance programme from both sides: Harbor Loom's cost of early payment against its own borrowing, and the cash Nordvik frees by paying later.
• Calculate Harbor Loom's DSO, DIO, DPO and cash conversion cycle today and with factoring plus longer supplier terms, and the working capital and cash it releases.
• Compare five payment methods for a USD 120,000 order to Nordvik Retail by bank cost and by a weighted score of safety, cost, buyer acceptance and speed, then rank them in a bar chart.