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Factors to Consider While Making a Financial Statement.

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Running head: FINANCIAL STATEMENT 1
Factors to Consider While Making a Financial Statement.
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FINANCIAL STATEMENT
Factors to Consider While Making a Financial Statement.
For a business to acquire a loan from the bank it must provide a well drafted financial statement.
Financial Statements are the periodic report cards of how a business is doing from a monetary
Perspective (Brechner, R. 2012).
The business should be generating some profit as the loan acquired should be paid back in a
given period of time. If the business operates at a loss the banker would not be in a position to
grant the loan. The cash flow of the business should be such that the cash expenditure of the
business relates to the cash source and also project the future expenditure. Collateral should be
available to compensate for the much loan to be acquired.
The direction of growth the business is going to undertake should be relevant to the current
market trends as they tend to change from time to time. This requires a management that is
competent and is highly recommended by the lenders as the character is a key factor. This could
be boosted by referrals from the respected community member, professionals from the field and
also in community involvement.
According to this research, the financial statement of a business should be as transparent as
possible to elude any doubts in the banker’s mind to grant you the loan. This leads back to the
competence of the business’s management. Lastly, the accuracy of the information provided in
the financial statement helps in creating a ‘comfortable relationship’ with the banker.

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Running head: FINANCIAL STATEMENT 1 Factors to Consider While Making a Financial Statement. Name Institution 2 FINANCIAL STATEMENT Factors to Consider While Making a Financial Statement. For a business to acquire a loan from the bank it must provide a well drafted financial statement. Financial Statements are the periodic report cards of how a business is doing from a monetary Perspective (Brechner, R. 2012). The business should be generating some profit as the loan acquired should be paid back in a given period of time. If the business operates at a loss the banker would not be in a position to grant the loan. The cash flow of the business should be such that the cash expenditure of the business relates to the cash source and also project the future expenditure. Collateral should be available to compensate for the much loan to be acquired. The direction of growth the business is ...
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