ACC543-You are a loan officer for White Sands Bank of Taos
Question # 00587325
Posted By:
Updated on: 09/12/2017 04:21 AM Due on: 09/12/2017
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 the following facts:
Current Ratio
Asset Turnover
Net Income
Earnings per Share 2017
3.1
2.8
Up 32%
$3.30 2016
2.1
2.2
Down 8%
$2.50 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.
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 the following facts:
Current Ratio
Asset Turnover
Net Income
Earnings per Share 2017
3.1
2.8
Up 32%
$3.30 2016
2.1
2.2
Down 8%
$2.50 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.
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Rating:
/5
Solution: ACC543-You are a loan officer for White Sands Bank of Taos