Question
Your firm is trying to secure a loan from the bank and the banks loan officer has asked for certain financial data necessary to ascertain
Your firm is trying to secure a loan from the bank and the banks loan officer has asked for certain financial data necessary to ascertain the profitability of the company. Specifically, he has asked for data to calculate the firms return on assets. Unfortunately, your finance manager has been called out of town and you are the only person available to provide the necessary information. You give the loan officer three balances; operating income, total assets, and revenue. The banker asks why you provided him with the revenue balance. What would your finance manager say?
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