Problem 24-3 (Essay)
Bradbum Corporation was Formed 5 years age through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Bradburn and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On june 10, 2018, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $35,000 notes, which are due on June 30,2018, and September 30,2018. Another notes of $6,000 is due on March 31,2019, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburn’s.
The commercial loan officer of Topeka National Bank requested the following reports for last 2 fiscal years.
Identify and explain what other financial reports and/or financial analysis might be helpful to the commercial loan officer of Topeka National Bank in evaluating Daniel Brown’s request for a time extension on Bradburn’s notes.
Assume that the percentage changes experienced in fiscal year 2018 as compared with fiscal year 2017 for sales and cost of goods sold will be repeated in each of the next 2 years. Is Bradburn’s desire to finance the plant expansion from internally generated funds realistic? Discuss.
Should Topeka National Bank grant the extension on Bradburn’s notes considering Daniel Brown’s statement about financing the plant expansion through internally generated funds? Discuss