Vince Hunt, president of Sarrant Enterprises, applied for a $175,000 loan from TD Bank.
The bank requested financial statements from Sarrant Enterprises as a basis for granting the loan. Vince has told his accountant to provide the bank with a balance sheet. Vince has decided to omit the other financial statements because a net loss occurred during the past year.
In groups of three or four, discuss the following questions:
1. Is Vince behaving in a professional manner by omitting some of the financial statements? Which qualitative characteristics is Vince not following?
2. a. 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?
b. What types of information about a business would bankers want to receive before extending a loan?
c. What common interests are shared by bankers and business owners?