AVERAGE JOES GYM Background You are an Analyst for the professionalservice firm, BUSI 1043 LLP. Your firm specializesin providing a wide variety of internal business solutionsfor different clients. After 4 months on the job, you walk into the partners office to provide him with your two-week notice. Given your excellent performance over the past few months, rival professionalservice firm, BUSI 2083 LLP has provided you with an offer you cannot refuse by providing you with a promotion to Consultant and a significant raise. Although sad to see you go, lead partner Justin Medakiewicz requested assistance on one last engagement: Average Joes Gym. Additional Information Average Joes caters to families and gives a substantial discount for families to work out together. Families that workout together reach their goalstogether. Membersreceive 2 free training sessions with enrollmentso that they may start reaching their goals as soon as they sign up. The exercise specialists that provide the training to the members hold the highest certification credentials and come from accredited universities with a specific degree focus in Exercise Science and or Health Education. The company has experienced significant growth in the past five years due to an increase in the popularity of health and fitness among social trends. As a result, Average Joes has applied to TD Bank for a $1 million long term loan in order to finance further expansion plans. Specifically, the funds would be used to purchase additional gym equipment. Average Joes application and financialstatements have been provided by Lisa Jennings, a credit analyst with TD Bank. She would like BUSI 1043 to conduct a preliminary review of Average Joes financial statements and determine whether Average Joes should proceed further into a more detailed analysis. Lisa would like BUSI 1043 to document the recommendations and supporting analysisin a report that will be maintained by the bank. Lisa: Average Joes has provided us with a copy of their most recent Balance Sheet and Income Statement (Exhibit I). I know this may not be enough to make the final decision, but it should be more than enough for you to get started. You: Yes, I can obtain much information from these two statements. Lisa: Okay, thats great. I took a quick look at the Balance Sheet and am wondering what has caused the change in cash. Cash is needed to pay back the loan. Although I havent done any rigorous analysis, it is a bit concerning to see the cash decline by such a large amount. You: I can definitely look into the decrease in cash. Lisa: It may also be useful to give some thought to what the Balance Sheet may look like of the loan is approved. Historicalstatements are fine, but they will not be able to provide you with this information. Additional information on the use of the loan is provided in Exhibit II. You: That is a great point. I will take this into consideration.

Lisa: Alright. Let me know if I can be of any further assistance. I look forward to reading your report. If you recommend proceeding with further due diligence, can you prepare a list of additional information that would be useful in making our final decision? You: Yes, I can most certainly do that. I will get started right away. You are excited with this last assignment and want to leave BUSI 1043 with a good impression. You begin to conduct some preliminary research by requesting industry comparable from the bank. You have located various industry ratios that can be used as a benchmark (Exhibit III)

Prepare the report. It is to include, organized and presented in a logical manner: quantitative analyses; ratio analyses; qualitative analyses; and appropriate recommendations given the case facts and analyses completed.