Obeña, John Rhey E. Mr.

Juancho Babista
ABM 12-Dignity Business Finance

Activity #6 (Standards in Financial Reporting)

You are a financial manager of a corporation and your company will open up for
investors. The Chief Executive Officer (CEO) of the company requested you to alter the
records of the finances so that the value of the liabilities will be 70% short-term loans
and 30% long-term loans from the original 50% short-term loans and 50% long-term
loans. Give your answer in not less than three (3) sentences and not more than five (5)
sentences. This activity is worth ten (10) points.

Financial managers generally are responsible and oversee the financial health of
an organization and he helps the company to make financial decisions. As a Financial
Manager of the company, I would say to the Chief Executive Officer (CEO) not to alter
70% short-term loans and 30% long-term loans, rather it is better if we will just stay with
50% short-term loans and 50% long-term loans. Because long-term loans are more
desirable than short-term loans inasmuch long-term loans are you will get a larger loan
amount, more time to pay off your loan, additionally a low interest rate or fixed interest
rather than short-term loans. Furthermore, potential investors may view it as a reason to
invest or participate if the company will hold the 50% short-term loans and 50%
long-term loans because it is better and good rather than short-term loans. This is what
I would advise as a Financial Manager of the company to The Chief Executive Officer
(CEO).