Foley's End

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.