Unformatted text preview: Class, For this week’s Ethics lesson, we are asked to explain a few things about Chester Hunter’s ethical behavior. He works for Jackrabbit Enterprises, and has applied for a loan from Belgrade National Bank. They have asked him to supply company financial statements. He has decided to omit some of the information because there was a loss during the past year. We have been asked to answer the following questions. Is Chester behaving in a professional manner by omitting some of the financial statements? My response is no, he is not. It is very unprofessional to give false information in order to receive a loan from the bank. They would be approving him under false pretense in this case. It would be considered fraud on his part. 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? A. They would be willing to provide records of assets, owner’s equity, and profits. B. They would be more willing to hide or not provide profit losses, high cost expenses, or a lot of owner withdraws. What types of information about a business would bankers want before extending a loan? The bankers would want financial statements such as income statements, statement of owner’s equity, a balance sheet or cash flow records. They may also require a company credit check, and records of expenses paid out to determine the business owner’s ability to repay the loan. What common interests are shared by bankers and business owners? The bankers have an economic interest in the company. This means they want their loan money repaid back with interest. The business owner's common interest is to also make a profit. Wendy Eller ...
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- Fall '09
- business owner, Owner’s Equity, Wendy Eller, Belgrade National Bank., company financial statements., high cost expenses