BSBA2-1A

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.

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

Plus (Advantage) Minus (Disadvantage) Plus (Advantage) Minus (Disadvantage)

a balance sheet is also
evident for Wendy
Service Inc. need to
obtain lines of credit or
loans.
Comparing the current
assets to current
liabilities determines
whether Wendy Service
Inc. can cover its short-
term obligations.
using a balance sheet is
that it does not tell you
the accurate value of a
company. While it does
provide you with a figure
for shareholders equity,
it does not actually
tell you how much the
company is worth. The
shareholders
equity should be a
minimum value for the
worth of a company.
The income statement Income statement is
provides detailed data considered as a fiction
on revenues. Besides because it is based on
the normal costs such accrual accounting and
as the cost of goods it does not provide cash
sold (COGS), employee transactions. Free cash
expenses, operational cannot be calculated
expenses, it also through income
accounts for additional statement.
costs like taxes
applicable.

Interesting Interesting
Balance Sheet is a snapshot of the company's Income statement presents the results of a
financial position at a given point in time. It company's operations for a given period a
details what the company owns, what it owes quarter, a year, etc. The income statement
and the owner's equity in the company. presents a summary of the revenues, gains,
expenses, losses, and net income or net loss
of an entity for the period.

MY

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 Shark Loans need to choose the statement of financial position as the basis if they
would accept or reject the application loan of Wendy Service Inc. because most lenders
require a balance sheet to determine a business’s financial health and creditworthiness.
When updated over time, the balance sheet effectively shows that the Wendy Service
Inc. has the ability to collect payments and repay debts. Plus, it shows Shark Loans that
Wendy Service Inc. have a track record of managing assets and liabilities responsibly.
So, if the Shark Loans accept the application of Wendy Service Inc., it will show lenders
that the company likely repay the debts in a timely manner.

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