This problem below is concerning financial statement analysis and decision making from various perspectives. Assume that you have just been hired as a loan officer at Slippery Rock State Bank. Your supervisor has given you a file containing a request from Lydex Company, a manufacturer of safety helmets, for a $3,000,000 five-year loan. Financial Statement data on the company for the last 2 years follows.
- calculation of ratios
- Make a recommendation to your supervisor as to whatever the loan should be approved. And explain the reasons of your recommendation.
Step by step calculation shown.
SOX: Accuracy of Financial Statements
The Sarbanes-Oxley Act (SOX) signed into law in July 2002 was intended to improve the accuracy of the financial statements prepared by publicly held companies. Carefully read the summary of this Act.
QUESTION: If you believe that legislation can guarantee the accuracy of public company financial statements, explain why previous laws have failed. If you believe that the reverse is true, please explain why CEOs and CFOs are paying so much attention to this law.
The response should be about 3 pages (double spaced, font size 12, times new roman)
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