Colleen Fernandez, president of Rhino Enterprises, applied for a $175,000 loan from First Federal Bank. The bank requested financial statements from Rhino Enterpirses as a basis for granting the loan. Colleen has told her accountant to provide the bank with a balance sheet. Colleen has decided to omit the other financial statements because there was a net loss during the past year.
Requirements:
1. Is colleen behaving in a professional manner by omitting some of the financial statements? What does each statement really tell about a company?
2. What types of information about their businesses would OWNERS be willing to provide bankers? What types of information would OWNERS not be willing to provide? What types of informations about a business would BANKERS want before extending a loan? What common interests are shared by bankers and business owners?
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