Creditor and Investor Information Needs
Response to the following problem:
Ink Spot is a small company that has been in business for two years. Wilford Smith, the president of the company, has decided that it is time to expand. He needs $10,000 to purchase additional equipment and to pay for increased operating expenses. Wilford can either apply for a loan at First City Bank, or he can issue more stock (1,000 shares are outstanding) to new investors. Assuming that you are the loan officer at First City Bank, what information would you request from Ink Spot before deciding whether to make the loan? As a potential investor in Ink Spot, what information would you need to make a good investment decision?