Question: Bu 102 FINAL PROJECT Chapter 18 Financial Statement Analysis You are a commercial lending officer for a local bank. Lester Corporation has come to



Bu 102 FINAL PROJECT Chapter 18 Financial Statement Analysis You are a commercial lending officer for a local bank. Lester Corporation has come to the bank requesting a $150,000 short term loan to meet operating needs. Lester has good, but not excellent credit and has been in business for a number of years, and has a history of profitablility, although not excessively profitable in recent years. The loan would be for one year at 9%. If the bank made the loan, the bank would earn $13,500 in interest income in addition to lending fees of approximately $3,000. At the end of the year, Lester is expected to repay the loan in full. Lester Corporation has presented a copy of the current year's income statement,cash flow and a comparative balance sheet for 2021 and 2020. Other information is provided along with industry averages. REQUIRED: You are to: a. Compute all ratios for Lester listed in the industry averages. b. Compare each ratio to industry averages and rate on the following scale Below average Average Above average 2 3. 4 c. Provide an overal comment of the following on Lester's: Liquidity Profitability Solvency d. Would you lend yes/no? Why or why not?
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
