Chester Hunter, president of Jackrabbit Enterprises, applied for a $250,000 loan from Belgrade National Bank. The bank requested financial statements from Jackrabbit Enterprises as a basis for granting the loan. Chester has told his accountant to provide the bank with a balance sheet. Chester has decided to omit the other financial statements because there was a net loss during the past year.
In groups of three or four, discuss the following questions:
1. Is Chester behaving in a professional manner by omitting some of the financial statements?
2. a. What types of information about their businesses would owners be willing to provide bankers? What types of information would owners not be willing to provide?
b. What types of information about a business would bankers want before extending a loan?
c. What common interests are shared by bankers and business owners?