Enticing Fashions Ltd designs and manufactures upscale

women s clothing The #129

Enticing Fashions Ltd. designs and manufactures upscale women’s clothing. The company’s
early customers were small boutiques in Toronto, Montreal, and Vancouver. Customers liked
the colours and fabrics used and enjoyed the unique styling of the garments. Demand for the
company’s clothing rose to the point where they are looking at opening a number of their own
stores in various retail locations across Canada. The company has approached its bank seeking
additional financing so that the company can proceed with its plan to develop retail locations
and hire more people to assist with various aspects of the business. The bank wants to see the
company’s financial statements. You are an accountant employed by a local accounting firm
and Enticing Fashions Ltd. has been your client for several years. In previous years, you have
prepared the company’s financial statements and corporate tax returns. Enticing Fashion’s
CEO has approached you because he wants to have an understanding about how the bank
may use the company’s financial statements in determining whether or not to grant the loan.
Required:Prepare a memo to Enticing Fashion’s CEO addressing his question regarding how
banks use financial statements to determine whether or not to grant loans to companies.View
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Enticing Fashions Ltd designs and manufactures upscale women s clothing The

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