Ethical Considerations Financial context

Fitness Craze is a small technology start-up company that specializes in personal fitness mobile apps. The three founders have been working hard on the company for the past two years since they founded Fitness Craze. The owners of Fitness Craze want to expand their business lines to include personal fitness trackers. To get into the manufacture and sale of personal fitness trackers, Fitness Craze will need to raise approximately $ 5 million from additional investors. Fitness Crazes CEO is making a presentation to a group of potential investors who are interested in funding the new fitness tracker project. This presentation could make or break Fitness Craze, so it is a high-stakes presentation. The CEO knows, that while several of Fitness Crazes ratios are strong, it is struggling financially. Some of the ratios would raise red flags to potential investors. The controller of the Fitness Craze is Tom Jones. Tom likes working for the start-up company, and he strongly believes in Fitness Crazes mission, which is to improve access to fitness and make it enjoyable. Fitness Crazes products are potentially life-changing for the people who use them to get more fit. Fitness Crazes CEO asks Tom to prepare a report for the investors that emphasizes the strong ratios while burying the weaker ratios deep in the report. Tom prepares a report that emphasizes the strong ratios. The weaker ratios are buried deep within the report. Tom has included a lot of extra data in the report to help camouflage those weaker ratios. Tom also went one step further in the report preparation: he changed a few of the weaker ratios to make them appear stronger. Tom rationalizes his actions by thinking that the revised report contributes to a greater good. The customers who use their fitness software products are likely to become healthier and live longer lives. He thinks that a few adjustments to the report are relatively minor when compared to the benefits that would be reaped by Fitness Crazes new product offerings if the potential investors do decide to invest in Fitness Craze.

You are the Financial Analyst for Fitness Craze. You helped in drafting the report, but not its final version. You also are a strong advocate of Fitness Crazes mission.

1) Using your judgment, please answer the following questions (no more than 150 words each):

Is/are there an ethical issue(s)? If so, what is/are they? Mention as many as possible and in as much detail as possible.

2) What are the ethical arguments for using the original ratios? Are their ethical arguments for using the adjusted ratios?

3) What are the possible consequences of the ethical violation(s) on the various stakeholders? Name all the stakeholders affected and what the effect might be on them.

4) What would you do in this situation (your boss is Tom Jones, but you work with the Board of Directors directly on various projects)? Be specific as to:

- what you would do,

- who you would talk to and

- what might occur based on your actions (to yourself and others).

PLEASE HELP!!!