Subject category:
Finance, Accounting and Control
Published by:
Ivey Publishing
Version: 2000-04-17
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Abstract
The financial manager for a property management company must decide whether to grant a new five-year lease to a restauranteur who had closed two months earlier as a result of an unresolved personal conflict with her former business partner. Using a statement of changes in financial position and a ratio analysis, the financial manager must analyze the past performance of the restaurant and consider these ratios and the restaurant''s future potential (projecting a balance sheet and an income statement), to assess the new lease against other alternatives prior to making a decision.
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Abstract
The financial manager for a property management company must decide whether to grant a new five-year lease to a restauranteur who had closed two months earlier as a result of an unresolved personal conflict with her former business partner. Using a statement of changes in financial position and a ratio analysis, the financial manager must analyze the past performance of the restaurant and consider these ratios and the restaurant''s future potential (projecting a balance sheet and an income statement), to assess the new lease against other alternatives prior to making a decision.