Analyze the financial condition of park avenue furniture

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Reference no: EM132656272

This has been a bad year for Miami-based Park Avenue Furniture. The firm increased sales revenues to 1,400,000, but total expenses balloned to 1,750,000. Although management realized that some of the firm's expenses were out of control, including cost of goods sold (700,000), salaries (450,000), and advertising costs (140,000), it could not contain expenses. As a result the furniture retailer lost 350,000. To make matters worse, the retailer applied for a 350,000 loan at Fidelity National Bank and was turned down. The Bank officer, Mike Nettles said that the firm already had too much debt. At that time, total liabilities were 420,000, owner's equity 600,000.

Question 1. analyze the financial condition of Park Avenue Furniture

Question 2. Discuss why you think the bank clerk turned down a Park Avenue loan request

Question 3. prepare a detailed action plan to improve the financial health of Park Avenue Furniture over the next 12 months

Reference no: EM132656272

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