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Financial Projections For Business Growth Trajectory Alan projects that sales for Year ending $31$st December $2021$ to be $$2\mathrm{.}8$ million whilst Year ending $31$st December $2022$ would be $$3\mathrm{.}2$m$.$ These projections included confirmed contracts worth $$2$ million in Year $2021$ and $$2\mathrm{.}2$ million in year $2022,$ to supply machinery and equipment. He is confident that LMS reputation will enable him to clinch the remaining differences of $$0\mathrm{.}8$ million in Year $2021$ and $$1$ million for Year $2022$ respectively. ACCT$608$ Financial Accounting Mock Exam $2$ SMU Classification: The additional warehouse space required by first quarter of Y$2021,$ would cost $$200,000.$ If this loan request of $$200,000$ was approved, principal payments amount to $$40,000$ per annum, starting from $1$ February $2021$; with annual interest payments at $$13,000$ per annum for the first $2$ years. As the business grew and expanded, LMS began to meet with liquidity and funding problems. The company estimated that it required $$200,000$ to support its growth plans. With a track record of timely interest payments during the previous years and a steady increase in profit, LMS submitted a loan proposal to the bank anxiously pending for a favourable outcome.

Q$1.$ Using the Profit and Loss Statement and Balance Sheet provided, analyse the trend of the company$$s financial performance over the Years $2018,2019$ and $2020,$ with the Year $2018$ as the base year.

Q$2.$ Analyse the health of the cash position of LMS$,$ regarding the operating, investing, and financing activities in the Cash Flow Statement over the Years $2018,2019$ and $2020.$ ACCT$608$ Financial Accounting Mock Exam $3$ SMU Classification: Restricted

Q$3.$ Compute and compare the financial ratios of LMS against the industry average, and determine the level of Activity, Liquidity, Solvency, and Profitability of the company. Future Financial Requirements

Q$4.$ Based on LMS projected Financial Statements for Year $2021$ and Year $2022,$ would $$200,000$ be sufficient to fund their growth trajectory? Funding Analysis

Q$5.$ Based on your analysis conducted for Questions $1-4,$ determine whether you, as a bank loan officer, would grant the $$200000$ loan request to LMS$.$ Please explain your reasons for the options you are going to provide to Alan.

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