John B. Loan Memorandum - Memorandum Date To Mr John B...

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Memorandum Date: September 12, 2013 To: Mr. John B. Stetson From: Spencer Whittaker, Deland City Bank Subject: Loan Request After analyzing your financial statements I would like to approve your loan request of $5,000. First and foremost, I have looked over all of the attached financial statements and despite a few concerning numbers, I have approved your request for a few reasons. Looking at your liabilities I observed that your Accounts Payable is a bit large. Accounts payable is the money owed by a company to its creditors. In your case, it would have helped to see what these loans are exactly and when your payments are due, but after seeing your net increase in cash over a one-month period, we can tell that your business is remaining solvent. Solvency is the ability to meet maturing obligations as they come due. Another determining factor that allowed us to approve your request was the fact that your
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Unformatted text preview: assets equal your liabilities and stockholder’s equity. It was great to see that despite having very profitable assets, your liabilities still remained relatively low. Profitability is an essential component of being in business. Your statement of retained earnings, which of course is the money that your business has retained rather than distributed to owners, is a great source of positivity for us to allow you to accept this loan. In one month’s time, they too have increased which shows that your business is growing financially. It would be our pleasure to extend this loan of $5,000 to you to be paid within two years from your latest financial statements end: August 31, 2015. We thank you for your continued patronage and look forward to hearing of Hatters Ride’s increased success....
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  • Fall '13
  • Holloway
  • Financial Accounting, Generally Accepted Accounting Principles, loan request, Spencer Whittaker, Mr. John B. Stetson

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