Question

Scenario: You are a loan officer for White Sands Bank of Taos. Paul Jason, president of P. Jason Corporation, has just left your office. He is interested in an 8-year loan to expand the company's operations. The borrowed funds would be used to purchase new equipment. As evidence of the company's debt-worthiness, Jason provided you with facts (available in the attached Scenario Worksheet). Jason is a very insistent (some would say pushy) man. When you told him you would need additional information before making your decision, he acted offended and said, "What more could you possibly want to know?" You responded you would , at minimum, need complete, audited financial statements.

Develop a minimum 700-word examination of the financial statements and include the following:

• Explain why you would want the financial statements to be audited.
• Discuss the implications of the ratios provided for the lending decision you are to make. That is, does the information paint a favorable picture? Are these ratios relevant to the decision? State why or why not.
• Evaluate trends in the performance of P. Jason Corporation. Identify each performance measure as favorable or unfavorable and explain the significance of each.
• List three other ratios you would want to calculate for P. Jason Corporation, and in your own words explain in detail why you would use each.
• As the loan officer, what else would you do to gain a better understanding of Paul Jason's, and the Corporation's financial picture and why?
• Based on your analysis of P. Jason Corporation, will you recommend approval for the requested loan? Provide specific details to support your decision.

Answer 1

Answer:

The inspected budget reports help the advance officer to give advance. Since a reviewed budget summary gives a confirmation that the money related position of the association is agreeable and there are less plausibility of fakes and mistakes . As reviewed budget summaries depend on the material judgment of the reviewer , it will be useful for the officer to give advance.

The given circumstance does not paint a great picture . As it is observed that the present proportion , resource turnover, benefits of the association is declining , it demonstrates a negative image of the association . These proportions are not significant for the choice .

Current proportion is appearing negative pattern . It is declining by 1:0 from the most recent year . It is a horrible occasion . It is critical for the installment of the enthusiasm of credit .

Resource turnover is appearing negative pattern , it expresses that the offers of the organization is declining and which prompts decrease in benefits and his inadequacy to pay interests . Along these lines , it is a troublesome occasion.

Reduction in benefits is a noteworthy negative occasion. It demonstrates the organization failure to pay interests on time anday additionally result in its liquidity .

The installment of low eps likewise demonstrates that the organization is having low benefits this year and it is a new occasion .

I might want to utilize intrigue inclusion proportion , with the goal that I could know how much occasions the benefit is accessible to pay of the intrigue.

second , I would look it's obligation value proportion , which will reveal to me that how much value is there in the organization to satisfy the current obligation and on the off chance that I will give him the advance , will he be sufficient competent to pay me the measure of advance on time .

Thirdly, I might want to ascertain the all out advantages for obligation proportion to look at whether there is adequate resources for pay off the obligation , if there will be liquidity in the firm .

I would investigate its past claims documented against him , if any . I might likewise want to think about his pattern of benefits and development in industry .

No , I might not want to offer advance to the organization , as it tends to be seen that there is negative conditions in the enterprise . Furthermore, the money related information of the enterprise is missing , which is an extraordinary factor for not giving the credit .