Purpose of Assignment This week’s focus is on the preparation of financial reports forinternal users, such as managers. This case study applies the conceptsof managerial accounting, through comparative and ratio analysis, andrequires students to identify financial data needed by managers fordecision making.About Your Signature AssignmentThis signature assignment is designed to align with specific programstudent learning outcome(s) in your program. Program Student LearningOutcomes are broad statements that describe what students should knowand be able to do upon completion of their degree. The signatureassignments may be graded with an automated rubric that allows theUniversity to collect data that can be aggregated across a location orcollege/school and used for program improvements. Assignment Steps Resources: Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Committee (SEC) Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products. Scenario: You are a loan officer for White SandsBank of Taos. Paul Jason, president of P. Jason Corporation, has justleft your office. He is interested in an 8-year loan to expand thecompany’s operations. The borrowed funds would be used to purchase newequipment. As evidence of the company’s debt-worthiness, Jason providedyou with the following facts: 20172016Current Ratio3.12.1Asset Turnover2.8 2.2Net IncomeUp 32%Down 8%Earnings per Share$3.30$2.50Jason is a very insistent (some would say pushy) man. When you toldhim you would need additional information before making your decision,he acted offended and said, ‘What more could you possibly want to know?’You responded you would , at minimum, need complete, audited financialstatements. Develop a minimum 700-word examination of the financial statements and include the following:Explain why you would want the financial statements to be audited.Discuss the implications of the ratios provided for the lendingdecision you are to make. That is, does the information paint afavorable picture? Are these ratios relevant to the decision? State whyor why not.Evaluate trends in the performance of P. Jason Corporation. Identifyeach performance measure as favorable or unfavorable and explain thesignificance of each.List three other ratios you would want to calculate for P. JasonCorporation, and in your own words explain in detail why you would useeach.As the loan officer, what else would you do to gain a betterunderstanding of Paul Jason’s, and the Corporation’s financial pictureand why?Based on your analysis of P. Jason Corporation, will you recommendapproval for the requested loan? Provide specific details to supportyour decision. Format the assignment consistent with APA guidelines.
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