Using the two balance sheet, as a Bank which company would you rather lend to?
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The proprietors of two businesses, L.L. Sams Company and Melinda Garcia Career Services, have sought business loans from you. To decide whether to make the loans, you have requested their balance sheets.
Solely on the basis of these balance sheets, to which entity would you be more comfortable lending money? Explain fully, citing specific items such as the accounting equation and amounts from the balance sheets. In addition to balance sheet data, what other information would you require? Be specific.
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Solution to your question is provided in a separate word file attached herewith. The loan proposal to these two companies is discussed with reference to their financial (profitability) and other ratios and other factors. Necessary calculations and workings are given to support the recommendations.
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