Joennel M. Semilla Ms.

Rowena Garcia
BSA103 The Entrepreneurial Mind

P-M-I CHART
Instruction: Respond to the scenario below by using the P-M-I Chart. Write your answers on the
spaces provided.
 In the Interesting box, write down some facts about the specific financial statement.
Scenario: Shark Loans received a request for a construction loan from Wendy Services Inc. This
construction loan will be used for the building of their fifth branch in Pasay. The company
submitted their statement of financial position and income statement. Help Shark Loans
choose which financial statement they would use as a basis on whether they will accept or reject
Wendy Services Inc.’s request. Refer to Page 2. Justify your decision.

Response 1: Statement of Financial Position Response 2: Income Statement

Plus Minus Plus Minus

 In terms of assets, the  In terms of liabilities, the
total amount of 200B Accounts Payable of
(P651,990) is greater 200B (P107,800) is
or higher than 200A greater than 200A
(P514,745). Which (P53,900). If the
implies that their Accounts Payable of
company is still 200A is lower than 200B
profitable. the interest is lower too.
 The total liabilities of
200A (P514,745) are
lesser than 200B
(P651,990)

Interesting Interesting
 The capital of Wendy Services Inc is continuously
increasing that implies that their company is growing
and still profitable.
 If we calculate the Debt Ratio of the 200A we can to
get a 17% Debt Ratio and in 200B we can get 22%
Debt Ratio this implies that the company (Wendy
Services Inc) has less leverage and has a strong equity
position.

My Decision

The company must select the statement of financial position to use as a basis on whether they will
accept or reject Wendy Services Inc.'s request. This is due to the fact that the income statement of
Wendy Services is very condensed and not very transparent as compared to the Statement of financial
position which gives better information about the asset and liability position of the company and hence,
provides a view on the liquidity and solvency position of Wendy Services which are most importantly
considered by companies providing loans. So, I think Shark loans will accept the construction loan from
Wendy Services Inc.