17.2 Detail Example: Loan Amount versus Sales Revenues

Situation: SaveTrust is a retail bank with branches operating in several regions of the country. One of its very popular and profitable programs is a loan program to small businesses. Loan amounts are approved based on clearly defined criteria. One such criterion is annual sales revenue of the business applying for the loan. The bank suggests that loan amounts should be related to the annual sales of the business requesting the loan.

Problem: SaveTrust's Senior Vice President for Business Lending is concerned that the criteria for approving loans are applied inconsistently across regions. At first she wants to compare how two regions apply the annual sales revenue criterion. The two regions are Aderly and Purth. The results are to be summarized in a preliminary report to the board of directors.