Crowley Building Supply sells various building materials to retail outlets. The company has just approached Sycamore State Bank requesting a $300,000 loan to strengthen the Cash account and to pay certain pressing short-term obligations. The company's financial statements for the most recent two years follow: Crowley Building Supply Comparative Balance Sheets This Year Last Year Assets Current assets Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses 59,500 4.500 482,000 951,680 22,500 1,520,180 1,647,620 144.500 22.500 294,000 591,590 29,500 Total current assets Plant and equipment, not 1,082,090 1,552,580 Total assets $ 3,167,800 $ 2.634,670 Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable. 8% $ $ 812,000 619,500 451,000 619,500 Total liabilities 1,431,500 1,070,500 Stockholders' equity Preferred stock, $25 par, 7% Common stock, S10 par Retained earnings 324.000 516,000 896 300 324 000 516,000 724,170 1.736,300 Total stockholders' equity Total liabilities and stockholders Equity 1,564,170 2,634,670 $ 3.167.800 $ Crowley Building Supply Comparative Income Statement and Reconciliation This Year $ 5,033,000 3,878,600 Sales Cost of goods sold Last Year $ 4,375,000 3,442,600 Gross margin Selling and administrative expenses 1,154,400 653,900 932,400 534,900 Net operating income Interest expense 500,500 49,560 397,500 49,560 Net income before taxes Income taxes (35%) 450.940 347,940 121,779 157,829 Net income 293.111 293,111 226,161 Divideros para Dividends paid Preferred dividends Common dividends 22,680 98,301 22,680 62,811 Total dividends paid 120,981 85,491 Net income retained Retained earnings, beginning of ye 172,130 724.170 7241 140,670 583,500 724,170 Retained earnings, end of year $ 896,300 $ During the past year, the company has expanded the number of lines that it carries in order to stimulate Sales and increase profits. It has also moved aggressively to acquire new customers. Sales terms are 2/10 n/30. All sales are on account. Assume that the following ratios are typical of companies in the building supply industry During the past year, the company has expanded the number of lines that it carries in order to stimulate sales and increase profits. It has also moved aggressively to acquire new customers. Sales terms are 2/10, n/30. All sales are on account. Assume that the following ratios are typical of companies in the building supply industry 2.5 Current ratio Acid-test ratio Average collection period Average sale period Debt-to-equity ratio Times interest earned assets Return on total assets Price-earings ratio 1.2 18 days 50 days 0.75 6.0 10% Required: 1. Sycamore State Bank is uncertain whether the loan should be made. To assist it in making a decision, you have been asked to compute the following amounts and ratios for both this year and last year a. Working capital This year Last year Working capital b. Current ratio (Round your answers to 2 decimal places.) This year Last year per Current ratio c. Acid-test ratio. (Round your answers to 2 decimal places.) Last year Acid-test ratio I This year I d. Average collection period. (The accounts receivable at the beginning of last year totaled $261,000.) (Round your intermediate calculations and final answers to 1 decimal place. Use 365 days in a year.) This year days Last year Average collection period days e. Average sale period. (The inventory at the beginning of last year totaled $514,000.) (Round your intermediate calculations and final answers to 1 decimal place. Use 365 days in a year.) This year Last year Average sale period sale period days d ays f. Debt-to-equity ratio. (Round your answers to 2 decimal places.) This year Last year Debt-to-equity ratio I g. Times interest earned (Round your answers to 1 decimal place.) This year Last year Times interest earned 2. For both this year and last year a. Present the balance sheet in common-size form. (Round your percentage answers to 1 decimal place i.e., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column.) Last Year Crowley Building Supply Common-Size Balance Sheets This Year Assets Current assets Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets 0.0 % Plant and equipment, net Total assets 0.0 % Liabilities and Stockholders' equity Liabilities: Current liabilities Bonds payable, 8% Total liabilities Stockholders' equity Preferred stock, $25 par, 7% Common stock, $10 par Retained earnings Total stockholders' equity 0.0 % 0.0 1 1 Stockholders' equity: Preferred stock, $25 par, 7% Common stock, $10 par Retained earnings Total stockholders' equity Total liabilities and equity 1 1 % % 0.0 % 0.0 % 0.0 % b. Present the income statement in common-size form down through net income. (Round your percentage answers to 1 decimal place ie., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column.) Last Year 0.0 Crowley Building Supply Common-Size Income Statements This Year Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Interest expense Net income before taxes 0.0 Income taxes Net income 0.0 % 0.00