BUSI 4001 Lecture 26: 1220 Finance Exam Review
7 Feb 2017
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Decision: whether to grant either loan or wcl extention. Considerations: -anything relevant from case facts not put anywhere else, refer to last paragraph. Look at whether positive or negative for which year. Positive and growing means it is generating cash from operations, can use towards business and paying off loans. Negative and decreasing means it is unable to generate cash from operations, relies on outside financing to pay off loans and get fixed assets. Sustai(cid:374)a(cid:271)le, does(cid:374)"t (cid:374)eed to ra(cid:272)k up (cid:373)ore de(cid:271)ts to pay (cid:272)urre(cid:374)t de(cid:271)ts. Add back amortization to get actual cash value. Look at whether positive or negative for which year, use numbers. Making money off sales even after expenses, interest. Money from net income means they can create own cash from sales for business. Look for accounts with change from use to source. Look at why it changed, use 16407 amount, effect on business, good or bad. What to change to improve, what to lower potentially.
