As an accountant, it is important to know where to locate specific information within the financial statement that supports decision making. In order to do this, it is important to understand how the different sections of the financial statement relate to one another.
Review the two scenarios below. Based on this week’s readings, consider how you would respond to the question posed after each.
Scenario 1: As a loan officer for First Loans Bank, you have been approached by Custom Window Blinds (CWB). CWB needs to borrow money to purchase new state-of-the-art window-blind manufacturing equipment. As the loan officer, you need to view the company’s financial statements. What information/ratios should you, as the loan officer, use? Why?
Scenario 2: You are president of Custom Window Blinds, and business has been very good. You are thinking of expanding to a new location. In order to decide if this is something your company should do, you ask the controller of your company, Joe Beancounter, to do an analysis based on your current financial statements. What information/ratios should Joe use?
Based on your readings for this week:
- Briefly describe how the information in the two scenarios is interrelated.
With these thoughts in mind:
Post a brief statement by Day 3 that expresses your thoughts on how the two given scenarios are interrelated. The length of your response(s) should be a minimum of 150 words.
Read a selection of your colleagues’ postings.
Respond by Day 5 to two or more of your colleagues’ postings in one or more of the following ways:
- Ask a probing question.
- Share an insight from having read your colleagues’ postings.
- Offer and support an opinion.
- Validate an idea with your own experience.
- Make a suggestion.
- Expand on your colleagues’ postings.
Return to this Discussion in a few days to read the responses to your initial posting. Note what you learned and the insights you gained as a result of the comments your colleagues made.