Could you help me with a case study? THIS WILL NOT BE SUBMITTED FOR ANY GRADES THIS IS FOR ME.

But it is ONLY TWO questions i need to be answered AND i HAVE to upload ALL of the paperwork involved because i do not know what you need to answer

All the images looks clear on my end: can you tell be which ones are blurry?

Important information:

please use $250,000.00 as the purchase price of the home.

Questions I need answered are 1: What would be the outcome of an electronic application submission.

2: What information do you think you need to be confident that you have exercised due diligence.

FN 00-0008094-00-011 UN 0018891879 10/30/03 PG01 BEACON SCORE : 755 AMOUNT OWED ON REVOLVING ACCOUNTS IS TOO HIGH. LENGTH OF TIME ACCOUNTS HAVE BEEN ESTABLISHED. PROPORTION OF BALANCES TO CREDIT LIMITS ON BNK/NTL REV ACCTS TOO HIGH. TOO MANY ACCOUNTS WITH BALANCES. *CARROT, BETTY SINCE 02/24/90 FAD 10/01/03 5, BISHOP PLACE, , ST CATHARINES, ON L2R5B9 MAR-M, BDS-04/24/1969, * INQS- 10/01/03 CAPTIAL CITY SAVINGS (780) 496-2000 09/01/03 CITIBANK MASTERCARD (800) 249-9135 09/01/02 SEARS CANADA (613) 745-5520 01/01/02 ASSOCIATES (514) 522-8368 07/01/01 ASSOCIATES (250) 382-8261 07/01/01 481BB72394 CIBC 06/01/01 ASSOCIATES (418) 589-4880 07/01/02 ASSOCIATES (418) 589-4880 # INQS - 9 ES-BOOKEEPER, BOOK WORLD SUMMARY 02/93-10/03, NO-PR/OI, FB-NO, TOTAL-5, HC$1K-15K, 5-ONES. BUS/ID CODE RPTD OPND H/C TRMS BAL P/D RT 30/60/90 MR DLA ZELLERS 650DV14 10/03 02/93 2000 500 0 R1 00 00 00 10/03 AMOUNT IN H/C COLUMN IS CREDIT LIMIT ALBERTA STUDENT FINA (780) 427-5551 10/03 02/99 7K 350 2000 R1 00 00 00 10/03 CITIBANK MASTERCARD (800) 249-9135 10/03 03/97 1K 550 R1 00 00 00 10/03 AMOUNT IN H/C COLUMN IS CREDIT LIMIT CDN TIRE M C (905) 735-3131 10/03 02/01 2K 150 R1 00 00 00 09/03 PREV HI RATES: R2 10/01. AMOUNT IN H/C COLUMN IS CREDIT LIMIT CHRYSLER GOLDKEY 650F256 10/03 06/00 15K 290 0 0 R1 00 00 00 09/03 AUTO LOAN SAFESCAN ID &1995 SMALL BUSINESS PROFILES - SIC R9910 - Machinery and Equi Average of Incorporated (T2) Businesses Number of Businesses in Sample Revenue Range: Low Value ( 000) High Value ($ 000) SELECTED EXPENSE ITEMS Gross operating revenue Cost of goods sold Purchases and material Closing inventory Opening inventory Wages, salaries and benefits Direct Indirect Occupancy expenses Depreciation Repairs and maintenance Fuel and oil Utilities Rent Financial expenses Interest and bank charges Professional fees General expenses Advertising Delivery expenses Insurance Other expenses Total expenses Net profit / loss Average number of paid employees BALANCE SHEET Total assets Total current assets Accounts receivable Closing inventory Other current assets Net fixed assets Other assets and adjustments Total liabilities Total current liabilities Current bank loans Other current liabilities Long term bank loans Other liabilities and adjustments Total equity 1/26/00 Ontario ON -R9910 -2 ent Rental and Leasing Services Whole Lower Upper Bottom Lower Upper Top Percent of Industry Half Half Quartile Middle Middle Quartile Businesses (Reliability) 50% 50% 25% 25% 25% 25% Reporting 150 25 25 188 25 57 188 270 5,000 188 5,000 57 188 270 5,000 ( thousands of dollars ) 298.6 (A) 81.7 515.5 47.5 115.9 237.6 793.3 100.0 24.7 (B) 24 46.9 0.5 44 351 58.8 32.7 25.2 (B) 2:S 47.8 0.4 4.5 33.8 61.9 327 15.7 (A) 0.5 309 0.1 0.9 42.8 189 20.4 15.2 (A) 0.4 30.0 0.1 0.8 44.1 15.8 19.7 80.8 (A) 11.5 150.1 59 17.0 71.2 229.0 76.2 3.5 (B) 0.0 7.0 0.0 0.0 13.0 1.0 2.0 77.3 (A) 11.5 143.1 59 17.0 58.2 2281 76.2 86.6 (A) 382 135.0 17.5 58.9 62.6 207.5 98.6 48.8 (A) 239 3.7 11.5 36.4 25.5 1219 96.6 83 (A) 23 14.2 0.5 4.1 6.9 21.5 57.1 0.4 (B) 0.0 0.7 0.0 0.0 0.1 13 41 6.6 (A) 2.5 10.7 0.8 42 8.5 12.8 62.6 22.6 (A) 9.4 35.8 4.6 14.2 216 49.9 52.4 17.1 (A) 9.3 25.0 6.7 11.9 10.6 394 94.6 12.3 (A) 17 17.0 5.6 9.9 33 306 83.7 438 (A) 1.6 8.0 1.1 2.0 7.3 8.8 87.1 15.7 (A) 6.8 245 72 6.4 158 332 76.9 42 (A) 0.8 1.1 0.0 1.6 6.5 89 54.4 5.7 (A) 1.4 10.1 0.4 24 6.8 13.3 49.0 5.7 (A) 46 6.8 6.8 2.4 2.5 11.0 673 63.8 (A) 245 103.2 288 202 34.0 172.4 952 288.7 (A) 92.6 484.8 66.5 118.8 2293 740.2 100.0 9.9 (B) -10.9 30.7 -18.9 2.8 83 53.1 99.3 3.2 0.4 5.9 0.2 0.6 27 2.1 ( thousands of dollars ) 387.8 (A) 197.1 578.4 113.8 280.4 201.8 955.0 142.4 (A) 79.7 205.2 72.0 87.4 86.6 323.7 70.8 (B) 39.7 101.9 104 69.1 163 187.6 15.7 (A) 0.5 30.9 0.1 0.9 428 18.9 55.9 (A) 39.5 72.3 61.5 17.4 275 117.2 206.8 (A) 96.5 3172 38.8 154.1 109.6 524.7 38.5 (B) 21.0 56.1 3.0 39.0 5.6 106.6 305.1 (A) 190.5 419.7 114.0 267.0 145.7 693.7 110.0 (A) 60.9 159.0 61.4 60.5 732 2447 12.2 (C) 53 19.1 1.2 9.3 6.2 320 97.8 (A) 55.7 139.9 60.2 51.1 67.1 2127 15.8 (C) 5.0 26.6 3.9 6.0 12 52.1 179.3 (A) 124.6 234.1 48.7 200.5 713 396.9 82.6 (B) 6.6 158.7 -0.2 13.4 56.0 261.4 1995 SMALL BUSINESS PROFILES - Ontario SIC R9910 - Machinery and Equipment Rental and Leasing Services FINANCIAL RATIOS Current ratio (times) Debt to equity ratio (times) Interest coverage ratio (times) Debt ratio (times) Revenue to equity ratio (times) Revenue to closing inventory ratio (times) Current debt to equity (percent) Net profit to equity (percent) Net fixed assets to equity (percent) Gross margin (percent) Return on total assets (percent) Collection period for accounts receivable (days) 13 28.9 -0.4 1.0 12.4 178.9 924.7 -165.1 83.0 -1.6 177.5 1.3 2.6 2.8 0.7 3.2 16.7 100.2 193 199.9 61.8 8.2 722 12 -560.6 2.4 -233.7 773.6 86.7 -11.7 79.8 1.4 20.0 0.7 1.0 8.7 136.0 451.8 -21.2 81.5 2.5 217.5 12 26 35 0.7 42 5.5 130.7 14.8 195.6 553 5.8 250 ON 1.3 27 2.7 0.7 3.0 41.9 93.6 203 200.8 63.7 88 86.3 -R9910 -2 DRAFT a report on the attached case study. IN DETAIL describe the process you would go through to approve this deal. Indicate: what would be the outcome on an electronic application submission what information do you think you need to be confident that you have exercised 'due diligence' describe the red flags in this case describe the hazards in this case describe the safeguards in this case use (at least 3) appropriate ratios to assist in risking the business The report should be TYPED and as a guide be about 3 to 4 pages. It should include professional rationalization of all of the aforementioned. Forward to: Real Estate Institute of Canada 5407 Eglinton Avenue West Suite 208 Toronto, ON MO9C 5K6 CASE STUDY- HOME ASSIGNMENT Betty and John Carrot owned for a year a home at 5 Bishop Place, St. Catharines, Ontario, L2R 5B9, which had an orange shed with a green roof in their back yard and can be reached at (555) 555-5555. Betty at 30 (as of April 24) is the manager (owner) of Georges Rentals Inc., for the past 3 years, earning $38,000/yr. (Betty has left as much money as she could in her company to help it during its infancy). With 5 children, John 30 (as of April 24) only works part-time as a bookkeeper, earning $12,000/yr. They have a car loan of $295/mth. They have saved $6,500 for their 5% down payment and are looking for a S year loan term and a 20 year amortization at 6.55%. They are looking for a larger house, since their 5 children are growing up so fast. The new house has a property tax cost of $2,000 and is located near the waterfront. NET WORTH - LOW (not including the value of the company) DETAILS ON NEW PROPERTY BEING PURCHASED - L2R 3C0 - Single Family Dwelling (Detached - One storey - 35 years old - 106 square meters The property appraisal has no red flags and substantiates the price paid. \fRALPH WATTERS Chartered Accountant 47 Scott Street West, St. Catharines, Ontario. L2R 181 GEORGE'S EQUIPMENT RENTALS INC. FINANCIAL STATEMENTS (UNAUDITED) AUGUST 31, 2000 NOTICE TO READER INDEX I have compiled the Balance Sheet of GEORGE'S EQUIPMENT RENTALS INC. as at August 31, 2000 and the Statements of Net Income and Retained Earnings for the period then ended from information provided by the client. I have not audited, reviewed or otherwise attempted to verify the accuracy or completeness of such information. Readers are cautioned that these statements may Page 1 not be appropriate for their purposes. Notice to Reader Balance Sheet Page 2 Statement of Retained Earnings Page 3 St. Catharines, Ontario. Statement of Net Income Page 4 October 26, 2000 Chartered AccountantGEORGE'S EQUIPMENT RENTALS INC. GEORGE'S EQUIPMENT RENTALS INC. BALANCE SHEET (Unaudited) STATEMENT OF RETAINED EARNINGS AUGUST 31, 2000 (Unaudited) As at AUGUST 31, 2000 ASSETS 2000 1999 CURRENT Cash on hand and in bank 66,922 $ 16,340 2000 Accounts receivable (net of provision for doubtful accounts) 73,986 72,463 Inventory 18,423 18,842 Deposits and prepaid expenses 994 1,419 Retained eamings (Deficit), beginning of period 69,447 160,325 109,064 Net income 68,255 CAPITAL ASSETS Rental fleet equipment 564,176 410,025 Retained earnings, end of the period $ 137,702 Vehicles 12,612 12,612 Office equipment 11,164 11,164 587,952 433,801 Accumulated amortization 186,917 114,960 401,035 318,841 TOTAL ASSETS 561,360 _$427,905 LIABILITIES and SHAREHOLDER'S EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities 178,348 $163,689 Current portion of long-term debt 53,992 50,315 Corporate income taxes payable (recoverable) 9,914 2,000 242,254 216,004 LONG-TERM DEBT PAYABLE Loans payable 143,424 104,727 Less amounts payable within one year 53,992 50,315 89,432 54,412 DUE TO SHAREHOLDER 91,971 88,041 TOTAL LIABILITIES 423,657 $358,457 SHAREHOLDER'S EQUITY Capital stock Retained earnings TOTAL LIABILITIES and EQUITY See Notice to Reader See Notice to Reader GEORGE'S EQUIPMENT RENTALS INC. STATEMENT OF NET INCOME For the fiscal year ending AUGUST 31, 2000 (Unaudited) 2000 1999 REVENUE Rentals 345237 $ 266,571 Retail sales 241,008 194,713 Service sales 15,443 8,008 Delivery charges 8,243 8,728 Other 1,452 1,528 $ 479,548 'COST OF SALES Cost of materials sold 159,001 118,306 Cost of re-rentals 22,273 26,816 Freight 6,643 8,111 Wages and benefits 144,143 125,873 Repairs and maintenance 13,246 21,426 345,306 300,532 GROSS PROFIT 266,077 $ 179,016 EXPENSES Advertising and promotion 2,044 1,797 Automotive expenses 24113 16,866 Bad debts (recovery) 13,078 2,483 Insurance 5,944 4,792 Interest and bank charges 8,096 8,348 Legal and accounting fees 1,600 Miscellaneous Office expenses Property taxes and licences Rent Security Telecommunications Travel Utilities Total expenditures OPERATING PROFIT 189,626 $ 121,835 Amortization 78,636 58,151 Management bonus 35,000 25,000 Gain (loss) on disposal of equipment (1,765) (7,198) 111,871 75,953 NET PROFIT before Taxes 717,755 45,882 Provision for taxes 9,500 2,000 NET PROFIT after Taxes 68,255 43,882 See Notice to Reader \fGEORGE'S EQUIPMENT RENTALS INC. FINANCIAL STATEMENTS (UNAUDITED) AUGUST 31, 2002 Notice to Reader Balance Sheet Statement of Retained Eamnings Statement of Net Income RALPH WATTERS Chartered Accountant 47 Scott Street West, St. Catharines, Ontario. L2R 1E1 NOTICE TO READER | have compiled the Balance Sheet of GEORGE'S EQUIPMENT RENTALS INC. as at August 31, 2002 and the Statements of Net Income and Retained Earnings for the period then ended from information provided by the client. | have not audited, reviewed or otherwise attempted to verify the accuracy or completeness of such information. Readers are cautioned that these statements may not be appropriate for their purposes. St. Catharines, Ontario. October 28, 2002 Chartered Accountant GEORGE'S EQUIPMENT RENTALS INC. BALANCE SHEET (Unaudited) AUGUST 31, 2002 ASSETS 2002 CURRENT Cash on hand and in bank 10,488 Investment in short-term money market securities 11,123 Accounts receivable (net of provision for doubtful accounts) 104,803 Inventory 20,397 Corporate taxes recoverable 7,028 Deposits and prepaid expenses 2,000 155,839 CAPITAL ASSETS Rental fleet equipment 768,895 Vehicles 12,612 Office equipment 13,259 794,766 Accumulated amortization 341,648 453,118 TOTAL ASSETS 608,957 LIABILITIES and SHAREHOLDER'S EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities 126,445 Current portion of long-term debt 90,828 Corporate income taxes payable LONG-TERM DEBT PAYABLE Loans payable 135,899 Less amounts payable within one year 90,828 45,071 DUE TO SHAREHOLDER 94,041 TOTAL LIABILITIES 356,385 SHAREHOLDER'S EQUITY Capital stock 1 Retained earnings 252,571 252,572 TOTAL LIABILITIES and EQUITY See Notice to Reader 217,273 2001 52,233 40,361 107,042 16,957 994 217,587 713,359 21,792 13,259 748,410 259,945 706,052 175,225 90,827 2,693 211,268 90,827 120,441 94,041 483,227 1 222,824 GEORGE'S EQUIPMENT RENTALS INC. STATEMENT OF RETAINED EARNINGS (Unaudited) As at AUGUST 31, 2002 2001 Retained earnings (Deficit), beginning of period $ 222,824 $ 137,702 Net income 29,747 85,122 Retained earnings, end of the period $ 2 See Notice to Reader GEORGE'S EQUIPMENT RENTALS INC. STATEMENT OF NET INCOME For the fiscal year ending AUGUST 31, 2002 (Unaudited) 2002 2001 REVENUE Rentals 398,436 403,521 Retail sales 205,799 239,150 Service sales 15,192 13,444 Delivery charges 15,001 16,507 Other 2,278 1,946 636,706 674,568 COST OF SALES Cost of materials sold 136,673 156,619 Cost of re-rentals 24,960 23,265 Freight 8,615 9,129 Wages and benefits 193,755 180,994 Repairs and maintenance 13,170 17,176 377,173 387,183 GROSS PROFIT 259,533 287,385 EXPENSES Advertising and promotion 3,801 2,954 Automotive expenses 37,304 26,239 Bad debts (recovery) 3,478 2,040 Insurance 8,926 7,037 Interest and bank charges 7,055 11,765 Legal and accounting fees 700 1,250 Miscellaneous (490) 9,994 Office expenses 6,470 5,683 Property taxes and licences 1,914 4,160 Rent 14,400 Security 2,303 Telecommunications 5,927 Utilities 1,841 Total expenditures 93,719 OPERATING PROFIT 165,814 199,718 OTHER INCOME (EXPENSES) Amortization (109,859) (83,760) Management bonus (25,000) (20,000) Gain (loss) on disposal of equipment (445) 164 (135,304) (103,596) NET PROFIT before Taxes 30,510 96,122 Provision for taxes 763 11,000 NET PROFIT after Taxes 29,747 85,122 See Notice to Reader