In this unit you have learned the importance of analyzing trends and determining financial ratios...
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Accounting
In this unit you have learned the importance of analyzing trends and determining financial ratios and percentages to help the users of accounting information make informed decisions.
For this task, you will be acting as a loan manager. Ms. Gonzalez, from AJ Services has made an appointment with you to discuss the possibility of expanding her business. She needs toborrow $30 000 from the bank to help her with the costs of expansion.Her accountant has put together the followinginformation based on the companysfinancial statements over the last four years.
a) Examine and conduct an analysis of the information provided. In your report make sure to include a trend analysis for Year 1 to Year 4 for each ratio. Also make sure to explain the individual ratios and its importance for decision making.
b) Based on your analysis of the data provided, would you grant the loan? Yes or No? Why or Why not? Make sure to provide at least two reasons for your answer.
c) What other information (i.e. ratios, credit history, etc) would be helpful to assist you in making a decision of whether or not to grant a loan? Explain in detail how this information would be useful.
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