Year-End Statements for a Bank Loan

The company had an opportunity to buy equipment that would remove a bottleneck in its busiest line of work. The bank was willing to consider financing but wanted year-end financial statements, comparative figures and a twelve-month cash-flow projection — within three weeks.

The year-end had not been closed, and the internal records stopped at a trial balance that had never been adjusted.

What the Client Needed

A complete and defensible set of year-end statements with prior-year comparatives, plus a cash-flow projection that showed the loan being serviced under realistic assumptions rather than optimistic ones. It had to be a package a lender would accept without follow-up questions, and it had to arrive before the deadline.

What We Did

We closed the year, posted the adjusting entries for accruals, prepaid expenses, depreciation and the shareholder loan, and prepared notice to reader financial statements with comparative figures for the prior year.

The cash-flow projection was built from actual monthly patterns rather than an even spread, with the proposed loan payments, the seasonal dip the business sees each winter and the sales tax and payroll remittance cycle all included. The statements, the projection and a short summary of assumptions went to the lender as one package.