\fCF General X Y Z AA AB AC AD AE AF AG Original analysis (two weeks ago) E Busia, Inc., a local manufacturing firm, approached Judy Intersan, one of BNB's loan officers, for a $1,000,000 loan to expand its facilities. Busia needs funds to expand production of its most successful line, which has experienced record growth in the past six months. Following Serra's credit policies, Judy requested Busia's financial statements (see the Original Financial Statements tab, provided in the Excel template). To assess the company's overall risk and credit worthiness, she th computed the financial ratios required by the credit union's loan department. The financial ratios reveal that the company largely meets the targets required in Serra's risk analysis (see the Other Tables and Figures tab in the Excel template). When, as in Serra's case, a loan application is right on the border of risk acceptability, Serra's loan officers often recommend that the underwriters approve a loan for a company with good prospects as a future bank client. The recommendations of the loan officers are typically approved by the underwriters. Judy feels that the company has a sound business Th model, good governance practices, and a product line that shows continued potential for growth, sta especially with current global shortages. Based on this special consideration, Judy recommends dec approval of the loan. Her boss, Sam, agrees, and the underwriters indicated that they would accept app the recommendation. erra Conversation with Jim Terrle this morning + "Judy Upon arriving at work, Judy finds a message from Jim Terrle, the owner of Busia, requesting a meeting "I'm co onal about the loan. Given the size of the potential loan and her recommendation to approve the loan with special consideration, Judy immediately rearranges her schedule to accommodate Jim's request. "What "I just g ecting Entries (Q2) Original Financial Statements Other Tables and Figures Ratio Analysis (Q1 & tatistics MacBook Air\fReview View Automate Help B Hyd Av ... E ab General 00 00 AG AH Al AJ AK AL AM AN AO AP AQ Meeting between Judy Intersan and Sam Oliver "Judy. How are you doing?" Sam asks as he waves Judy into his office. meeting "I'm concerned," Judy answers as she sits. loan request. "What's the problem?' Sam asks. "I just got through talking with Jim Terrle." d with his Previous "Jim? Isn't he the owner of that the company, Busia, Inc., that just applied for a $1M loan to expand veral its business? I looked over their financial statements. It looks like a decent investment for the bank." ncluding Judy nods. "I felt the same way, until I talked with Jim today. It turns out the financial statements they gave us were unaudited." No entries + "I don't see that as a problem, as long as there weren't any surprises after the audit." No entries "Unfortunately, there were a few issues raised by the audit. The auditor found some transactions ars. The that they had not handled properly." for partial Sam frowns. "That's never a good sign. Was it fraud?" sales from paid on Judy shakes her head. "I don't think so. I think they were honest mistakes, but I'm still a little st half of concerned that they weren't more careful before applying for such a large loan. I'm also concerned sales were about some of the ratios given the corrected financial statements. Remember, they were borderline ies. in my original risk analysis. They only met four of the six required thresholds, and I'm afraid they will look even worse now. Honestly, we may not want to approve the loan." ries (Q2) Original Financial Statements Other Tables and Figures Ratio Analysis (Q1 & Q4) Upd MacBook Air 80 DII