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    American International Group: Case Analysis

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    Chona Abelgas
    - In 1919, American Cornelius Vander Star established AIG as a general insurance agency. - AIG faced a meltdown in 2008 and accumulated debts, requiring a $182 billion bailout from the U.S. Treasury. - The company was also fined $1.6 billion for fraud by the SEC and Justice Department, and had to sell assets to pay debts.

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    American International Group: Case Analysis

    Uploaded by

    Chona Abelgas
    78 views4 pages
    - In 1919, American Cornelius Vander Star established AIG as a general insurance agency. - AIG faced a meltdown in 2008 and accumulated debts, requiring a $182 billion bailout from the U.S. Treasury. - The company was also fined $1.6 billion for fraud by the SEC and Justice Department, and had to sell assets to pay debts.

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    Case Analysis

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    Case Analysis

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    - In 1919, American Cornelius Vander Star established AIG as a general insurance agency. - AIG faced a meltdown in 2008 and accumulated debts, requiring a $182 billion bailout from the U.S. Treasury. - The company was also fined $1.6 billion for fraud by the SEC and Justice Department, and had to sell assets to pay debts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    78 views4 pages

    American International Group: Case Analysis

    Uploaded by

    Chona Abelgas
    - In 1919, American Cornelius Vander Star established AIG as a general insurance agency. - AIG faced a meltdown in 2008 and accumulated debts, requiring a $182 billion bailout from the U.S. Treasury. - The company was also fined $1.6 billion for fraud by the SEC and Justice Department, and had to sell assets to pay debts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    AMERICAN INTERNATIONAL GROUP

    Case Analysis

    Abelgas, Chona
    Homboy, Germaine
    Latag, Keziah Ro
    Mamad, Ogie
    Tura, Realyn

    In 1919, when American


    Cornelius Vander Star
    established the AIG, A
    General Insurance
    Agency. AIG was one of
    the many companies
    facing a meltdown in
    2008, U.S. Treasury paid
    $182 billion for bailing
    out the insurance
    company. The company
    had to sell their assets to
    pay their accumulating debts. The insurance company was formed
    in fraud cases by the Security and Exchange Commission and U.S
    Justice Department where they had to pay a fine of $1.6 billion along
    with other criminal charges against their name.

    Issues and Concerns


     AIG after facing a meltdown in 2008, AIG accumulated web
    debts.
     After being framed in fraud cases by SEC & US Justice
    Department and additional of financial problem occurred to pay
    the fine of $1.6 billion.
     The delicate decision making whether to sell or not to sell their
    assets.

    Point of View
     Financial Analyst

    Statement of the problem


    How can AIG recover of surpassing/repaying all their debts?
    Objectives
     to know the roots of all debts
     to resolve financial crisis in AIG
     to make strategies evade the financial crisis again

    Areas of consideration
     financing resources
     industry analysis
     economic performance

    Alternative Courses of Action


    ADVANTAGES DISADVANTAGES
    DESCRIPTION
    a.Utilize well all the a. Risky, because it
    1. Maximizing the resources. can lessen the
    remaining resources. b. They can pay their available assets.
    debts without having
    another liability.
    a. Erase the bad a. Investors will
    2. Change the image of the doubt the company’s
    company name company. credibility.
    b. Time Consuming
    a. Another source to a. Investors doubts
    3. Encourage more pay all the web debts. the company’s
    investors. standing because of
    b. Increase sales. the issue and the
    crisis.

    Recommendation
     We recommend the course #1 which is to maximizing the
    remaining resources.

    Plan of Action
    Since financial statement is confidential, we assume this figure
    below:
    $182B – received from the US Government for their Treasury
    Bills.
    Assuming half of $182B is payable for all the clients in AIG and
    half will be their cash on hand. Therefore, $91B add the 1.6 fine in
    the case and add the assuming other expenses of $10M; all the
    liabilities will be 92,610,000,000. Thus, assets will be $91B, add all
    the assets that are sold which is amounting to $100B a total of
    $191B.

    191,000,000,000
    Current Ratio =
    92,610,000,00
    0

    = 2.06:1
    In simple term, the current ratio of 2.06:1.00 means AIG has
    more than enough to cover its current liabilities if they come due.
    Conclusion
    We conclude that AIG needs to maximize their assets than its
    liabilities so that, the company will not barred down that appears to
    be unfavorable. According to (Current Ratio|
    Investopedia https://www.investopedia.com/terms/c/currentratio.
    asp#ixzz57mMj6hsJ) February 21, 2018, The higher the current
    ratio, the more capable the company is of paying its obligations, as it
    has a larger proportion of asset value relative to the value of its
    liabilities. However, a high ratio (over 3) does not necessarily indicate
    that a company is in a state of financial well-being either. Thus, it
    should be allocated properly. And to better assess whether or not
    these issues are present, a liquidity ratio more specific than the
    current ratio is needed. Moreover, it’s better to utilize well all the
    company’s resources than sacrificing the American Group Standing.

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