financial ratio analysis 52
Morgan Jackson wants to open a full-service salon in the local mall. She will need start-up funding to help cover costs. Morgan is meeting with Our Community Bank to discuss financing options available to her. She has $4,500 available to invest in her company and needs another $35,500 to pay for the start-up costs.
Robert Paige has always dreamed of owning his own real estate brokerage and finally has the opportunity to make that dream a reality. He has four real estate agents who will come to work for his company when it opens. Robert has $10,000 to contribute to this business but needs an additional $50,000 based on the start-up budget he developed. Our Community Bank is also Robert’s preferred lender.
You are the commercial banker meeting with both entrepreneurs who have provided you with their business plans which included the following financial projections. You can only loan money to one of these businesses.
- Develop a full financial ratio analysis on both proposed ventures, and use that analysis to make a recommendation to your Board of Directors on which company should receive the loan and why?
- Submit your answers in a single Word document.