Suppose you work in the loan department of Third National Bank. Byron Blakely, the owner of Byron’s Beauty Solutions, has come to you seeking a loan for $500,000 to expand operations. He proposes to use accounts receivable as collateral for the loan and has provided you with the following information from the company’s most recent financial statements: Requirement 1. Analyze the trends of sales, days’ sales outstanding, and cash collections from customers for 2019 and 2018. Would you make the loan to Blakely? Support your decision with facts and figures. Assume there are no write-offs in 2018 and 2019.
Suppose you work in the loan department of Third National Bank. Byron Blakely, the owner of Byron’s Beauty Solutions, has come to you seeking a loan for $500,000 to expand operations. He proposes to use accounts receivable as collateral for the loan and has provided you with the following information from the company’s most recent financial statements: Requirement 1. Analyze the trends of sales, days’ sales outstanding, and cash collections from customers for 2019 and 2018. Would you make the loan to Blakely? Support your decision with facts and figures. Assume there are no write-offs in 2018 and 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Suppose you work in the loan department of Third National Bank.
Byron Blakely, the owner of Byron’s Beauty Solutions, has come to you seeking a loan for
$500,000 to expand operations. He proposes to use
and has provided you with the following information from the company’s most recent financial
statements:
Requirement
1. Analyze the trends of sales, days’ sales outstanding, and cash collections from customers
for 2019 and 2018. Would you make the loan to Blakely? Support your decision with facts
and figures. Assume there are no write-offs in 2018 and 2019.
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