Answered You can buy a ready-made answer or pick a professional tutor to order an original one.
Ratio Analysis
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:
2017 2016
Current Ratio 3.1 2.1
Asset Turnover 2.8 2.2
Net Income Up 32% Down 8%
Earnings per Share $3.30 $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:
- 1. Explain why you would want the financial statements to be audited.
- 2. 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.
- 3. Evaluate trends in the performance of P. Jason Corporation. Identify each performance measure as favorable or unfavorable and explain the significance of each.
- 4. 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.
- 5. 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?
- 6. Based on your analysis of P. Jason Corporation, will you recommend approval for the requested loan? Provide specific details to support your decision.
- @
- 165 orders completed
- ANSWER
-
Tutor has posted answer for $20.00. See answer's preview
*** audit ** ********* ********** ** ********* before ********* *** loan ******* *** audit is ********* ** ** *********** ******* *** ****** and ******** **** *** ********* ********** *** ******** ****** *** *** *** reveal the **** position ** *** corporation *** ***** ****** of *********** ******* ***** *** ********* statements *** ***** *********** ** *** ******* more credible *** ********** *** ******* ********* ********** ****** *** bankers to ********* *** risk involved ** ********* loan ************** *** ****** ******* ratio ******** the ******** ** the ******* ** ****** ********** *********** ***** its ******* ****** *** current ***** ** *** * Jason Corporation *** ******** ************* **** ** in *** **** **** ** 31 ** *** year 2017 ** ** ** ********** ***** *** ********* ** *********** ** *** ******** ******** of *** ******* The *********** in ratio is favorable for ********* loan ******** ** P Jason *********** ***** ******** ******** *** ********* the ******** ** ** utilizing *** ***** ****** ** generating *** ******* **** ratio has **** ***** an increasing ***** and *** ***** *** improved from 22 ** the **** **** ** 28 in *** **** **** It ********* an ******** in the ********** of *** ******* ** *********** ** ****** *** ** is a ********* point in ********* **** to the company The *** ****** ** P ***** *********** has **** ******** ************* ****** *** **** 2016 *** *** ****** ********* ** 8% ******* ****** *** **** **** *** *** ****** increased ** *** It **** ***** ** ********** ***** *** ******** **** the *** income ** *** *********** ** ********** ** ** **** * ********* ***** **** *********** ** providing **** to the *********** *** ******** *** ***** ** *** *********** *** also increased ************* **** **** per ***** ** **** *** ***** ** is *** ***** ********* ********** ** *********** of ********* position ** *** **************** Ratios Following are the ***** ****** that are **** to be ********** ** ********* **** ********* ******** of the corporationInterest ******** Ratio ** ** the ***** **** calculates *** ******* ** the business ** pay its ******** ******* This ***** ** ********** from *** ******* ***** ** **** as interest on the ***** *** advances is *** reward *** the **** and ** *** ******* ** *** ******** **** ** *** ******** ******* is *** **** *** ***** of **** **** ** ** riskDebt Ratio Debt ***** measures the *********** ** *** ******* ** relation to *** ***** ****** ** other ***** ** ********** *** ability ** *** ******** **** ** *** *** *********** **** *** ****** *** ******* ****** **** debt ***** are ********** ***** it is presumed **** **** *** ****** **** ***** *** are **** having **** ****** ** fixed ******** expenseDebt ** ****** ***** **** ***** ******** *** ***** debts of *** company **** *** equity *** ********** *** ********** ** financing ** the *********** ******* **** comes from investors *** **** ********* ***** debt ** ****** ***** ** 050 which ***** **** ******* a ******* should have one dollar of equity against each ** cents ** ***** ** the **** ** equity ***** ** high it ***** **** *** company *** ***** ********* ***** and *** **** **** to ***** **** *** *** **** get ************* ********** ******* ******** *********** ** the ******* who are ** *** **** ** ******* ** *** ************ Collateral security and its ***** ****** **** ** ***** ********* *** ******* ******* ********* ****** **** the analyst5 Projected ****** ********* ******* sheet and cash **** *** **** *** years6 Past **** **** ********* ********** ** *** companyRecommendation **** *** ***** ********** *** *** available **** it ** ***** **** the *********** of the ******* *** ******** ****** *** last one **** The ******* ratio asset ******** *** ****** *** *** have ***** ******** *********** *** ******** ******* So **** *** given *********** ** is *********** to ******* **** ** * ***** *********** *** *** *********** provided is not ********** to make *** decision *** **** ****** **** investigate other ****** *** *** financial ********** ** **** *** years before ********** *** ********************
