You are a bank loan manager and responsible for approving small business loans and loans to investors who are purchasing commercial and residential real estate for rental purposes.

Discussion question 1: Explain which financial reports would you request and review to evaluate the following:

• The company's history and ability to make loan monthly payments and repay the loan
• The company's history and ability to earn a steady and reasonable profit

Discussion question 2: Working capital and the current ratio measure liquidity to pay short-term debts. The business loans you are approving are long-term debts. Do you think you consider a company's working capital and current ratio? Why or why not?