Joan Cooper, president of Tobago Enterprises, applied for a $1,000,000 loan from First National Bank. The bank requested financial statements from Tobago Enterprises as a basis for granting the loan. Sue told her accountant to provide the bank with a current balance sheet. Sue has decided to omit the other financial statements because there was a net loss during the past year. She is concerned that the loan might not be approved if she provides too much information.
1. What are the names of the other financial statements discussed in Chapter 01 and what information does each provide?
2. Discuss whether or not Sue is behaving in a professional manner by omitting some of the financial statements.
3. Discuss the types of information a business should provide to bankers. What types of information would managers not is willing to provide?
4. Discuss the types of information banker's want before they would approve a loan and what they would be looking for in that information.