Problem related to decision making across the organization

Reference no: EM13756639

Decision Making Across the Organization

You are a loan officer for Great Plains of Davenport. Jason Putnam, president of J. Putnam Corporation, has left your office. He is interested in an 8-year loan to expand the company's operations. The borrowed funds would be used to purchase new equipment. As evidence of the company's debt-worthiness, Putnam provided you with the following facts.

	2014	2013
Current ratio	3.1	2.1
Asset turnover	2.8	2.2
Cash debt coverage	.1	.2
Net income	Up 32%	Down 8%
Earnings per share	$3.30	$2.50

Putnam is a very insistent (Some would say pushy) man. When you told him that you would need additional information before making your decision, he acted offended and sad, "what more could you possibly want to know?" You responded that, at a minimum, you would need complete, audited financial statement.

Instructions:

With the class divided into groups, answer the following.

1. Explain why you would want the financial statement to be audited.

2. Discuss the implications of the ratios provided for the lending decision you are to make. That is, does the information paint a favorable picture? Are these ratios relevant to the decision?

3. List three other ratios that you would want to calculate for this company, and explain why you would use each.

Reference no: EM13756639

Questions Cloud

Identify the deliveries and organizational units : Use an example of a project you are familiar with or are interested in, Identify the deliveries and organizational units (people) responsible. How would you code your system? Give an example of the work packages in one of your cost accounts

Formulation phase of policymaking in general terms : 1. Discuss the formulation phase of policymaking in general terms.

Apply the underlying principles of economics : Identify a relevant economic article from either the Strayer Library or a newspaper. The article must deal with any course concepts covered - Apply the underlying principles of economics and the economic way of thinking to assess market issues and ..

Develop a communication plan for an airport security project : Develop a communication plan for an airport security project. The project entails installing the hardware and software system that (1) scans a passemders's eyes, (2) fingerprints the passenger, and (3) transmits the information to a central location ..

Problem related to decision making across the organization : You are a loan officer for Great Plains of Davenport. Jason Putnam, president of J. Putnam Corporation, has left your office. He is interested in an 8-year loan to expand the company's operations. The borrowed funds would be used to purchase new e..

Global economy impacts the implementation of HRM function : The global economy impacts the implementation of the HRM function in multi-national organizations to achieve organizational goals. The strategic management planning process affects the contribution of an organization's HRM policies and practices to a..

Creating a mockup ui of current android lollipop interface : creating a mockup UI of the current Android Lollipop interface. I basically need the exact same interface layout/design, with few changes.

Build a database : Build a database and produce a query report that shows 10 fields as in Table iamge using Microsoft Access

Compare leadership teams and quality improvement teams : Compare leadership teams and quality improvement teams. Briefly describe the various elements of strategy development. List the practices used to improve customer-supplier relationships

User Account

All Pages