This team assignment was introduced to you in Unit $1.$ You should have already been collaborating and working together as a team. It is associated with the following outcome, but the assignment is due in Unit $4$:

MT$480-1$: Analyze financial statements to measure the financial performance of a b

In this course, you have an opportunity to work with your classmates in teams. Interacting and solving problems together, even at a distance, is a key skill in today's global organizations.

In this assignment, you will be assessed based on the following Course Outcome:

PC$-1\mathrm{.}2$: Contribute to team goals and objectives through active participation and collaboration.

You will demonstrate the ability to solve complex problems by establishing a team setting and ensuring all team members complete the agreed$-$upon and assigned tasks properly. Each team member is required to fully support the team goals and objectives by fulfilling their contributions and consistently assisting and$/$or supporting others in their contributions.

The team assignment is due in Unit $4.$ Your instructor assigned your team ; you should have communicated with your team throughout the first three units.

Your team has a proprietary Team Discussion Board area under Unit $10$ labeled Team X Discussion. Scroll down, and when you see "Filter by: $"$ select $$All groups.$$ Then you will see the option to choose Group $1,2,3,$ etc.

Your team also has a team$-$specific email group list and a private synchronous discussion area. Please post your meeting minutes in your Team Discussion Board area. Setting up a specific time each week to check in may be helpful.

Requirements:

This assignment represents the primary steps of understanding the nature of cash flows in a business. Year$-$to$-$year comparative balance sheets are used in the analysis. After review and analysis of the data, you will prepare a business memo to outline the sources or uses of specific account cash flows and how these outcomes support your reasoning for approving or denying the loan. The analysis is based upon year$-$to$-$year changes of these specific balance sheet sections: Accounts Receivable, Inventory, Accounts Payable, Wages Payable, Plant Property and Equipment, and Long$-$Term Debt.

You will:

Analyze financial data, present the rationale for what your loan committee $($team$)$ wants to do on the loan renewal request, and submit supporting documents.

Participate in the Team Discussion Board located under Unit $10$ in the left navigation of your course.

Each team member is required to individually submit the Team Peer Evaluation Form to the Unit $4$ Team Peer Evaluation Form Dropbox. The form is located under Course Documents.

Instructions: Read the scenario and then access the data worksheet below. Review the grading rubric, which provides tips on organizing your team process.

Scenario: The team assignment requires an analysis of specific financial data of Bob Smith, Inc. Bob is an existing bank customer. When the loan to Bob was originally made in $2016,$ the bank required Bob to increase the YE $2016$ cash balance to at least $$70,000$ to qualify for the interest rate that the bank used for the original loan. This cash balance was required for the bank to make its target yield on the loan created. The Cash Flow Statement and Balance Sheet show an actual YE $2017$ cash balance of less than $$34,000.$

The team assignment requires participation in a team effort to complete the $2017$ Cash Flow Statement. In addition, your team will also prepare $$Common Sized Financial Statements$$ for the $2$ years shown. In the Unit $1$ Seminar, you discussed how to complete and use the $2017$ Cash Flow Statement outcomes to explain how specific accounts influenced Bob$$s low cash balances; in other words, some reasons why Bob has no cash!

This information allows you to substantiate the $2018$ loan denial or renewal request. Your team is the bank's loan committee, and you will address an internal memo to the loan officer in charge of this loan facility, giving the committee$$s decision on whether to approve the loan as is$,$ renew the loan with modifications, or deny the loan request. Be sure you move away from definitions to analysis. You do not need to give definitions of balance sheet accounts.

The Balance Sheets and Cash Flow Statements provided in the data worksheet below will assist you in your analysis. From these documents, and from the ones you produced, discuss the following:

The operating cycle of the company

The covenants within the CC&Rs that the company did not comply with

The Common Sized Financial Statement $($CC&R s$)$

The Cash Flow Statement

What did management do to fall short of the minimum cash requirements?

Was the company$$s failure to meet cash balance requirements a result of the company being unable to meet the requirement or because of management actions?

What could be management$$s motivation for not complying with the loan$$s CC&Rs$?$

Where was the major portion of the company$$s working capital used?

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