Besides the lender would require P Jasons business plan to gauge thdirection in

Besides the lender would require p jasons business

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collateral for the loan. Besides, the lender would require P. Jason’s business plan to gauge the direction in which the firm is heading. This plan will allow the lender to verify whether the company is meeting business objectives or not. Question 6 Based on the analysis of P. Jason’s financial records, the lender will recommend approval for the requested loan. The analyzed financial ratios prove the favorability of this decision and the ability of the firm to meet its obligations. Notably, the company’s earnings per share rose from $2.50 to $3.30, which shows increased profitability ( Mazarak & Fomina, 2016). The current ratio also increased to 3.1 from 2.1, indicating that assets have tripled current liabilities. Additionally, assets turnover rose from 2.2 to 2.8, showing positive growth at the firm. Overall, all these measures outline the organization’s efficiency and capacity to repay the financial institution the loaned amount plus interest.
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RATIO ANALYSIS 5 References Kimmel, P. D., Weygandt, J. J., Kieso, D. E., & Trenholm, B. (2016). Financial Accounting . New York: Wiley Custom Learning Solutions. Mazarak, A., & Fomina, O. (2016). Tools for Management Accounting. Economic Annals- XXI , 159 (5-6), 48-51. Robinson, T. R., Henry, E., Pirie, W. L., & Broihahn, M. A. (2015). International Financial Statement Analysis . New York: John Wiley & Sons.
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