Suppose you are the manager of Greg’s Tunes, Inc. The company needs a bank loan in order to purchase music equipment. In evaluating the loan request, the banker asks about the assets and liabilities of the business. In particular, the banker wants to know the amount of the business’s stockholders’ equity.
Requirements
1. Is the banker considered an internal or external user of financial information?
2. Which financial statement would provide the best information to answer the banker’s questions?