Paul Sabin organized Sabin Electronics 10 years ago to produceand sell several electronic devices on which he had securedpatents. Although the company has been fairly profitable, it is nowexperiencing a severe cash shortage. For this reason, it isrequesting a $530,000 long-term loan from Gulfport State Bank,$115,000 of which will be used to bolster the Cash account and$415,000 of which will be used to modernize equipment. Thecompany’s financial statements for the two most recent yearsfollow:

Sabin Electronics
Comparative Balance Sheet
	This Year		Last Year
Assets
Current assets:
Cash	$	82,000	$	180,000
Marketable securities		0		21,000
Accounts receivable, net		516,000		330,000
Inventory		980,000		625,000
Prepaid expenses		22,000		25,000
Total current assets		1,600,000		1,181,000
Plant and equipment, net		1,570,200		1,400,000
Total assets	$	3,170,200	$	2,581,000
Liabilities and Stockholders Equity
Liabilities:
Current liabilities	$	815,000	$	460,000
Bonds payable, 12%		750,000		750,000
Total liabilities		1,565,000		1,210,000
Stockholders' equity:
Common stock, $15 par		720,000		720,000
Retained earnings		885,200		651,000
Total stockholders’ equity		1,605,200		1,371,000
Total liabilities and stockholders' equity	$	3,170,200	$	2,581,000

Sabin Electronics
Comparative Income Statement andReconciliation
	This Year		Last Year
Sales	$	5,150,000	$	4,440,000
Cost of goods sold		3,905,000		3,480,000
Gross margin		1,245,000		960,000
Selling and administrative expenses		659,000		554,000
Net operating income		586,000		406,000
Interest expense		90,000		90,000
Net income before taxes		496,000		316,000
Income taxes (30%)		148,800		94,800
Net income		347,200		221,200
Common dividends		113,000		92,000
Net income retained		234,200		129,200
Beginning retained earnings		651,000		521,800
Ending retained earnings	$	885,200	$	651,000

During the past year, the company introduced several new productlines and raised the selling prices on a number of old productlines in order to improve its profit margin. The company also hireda new sales manager, who has expanded sales into several newterritories. Sales terms are 3/10, n/30. All sales are onaccount.

Required:

1. To assist in approaching the bank about the loan, Paul hasasked you to compute the following ratios for both this year andlast year:

a. The amount of working capital.

b. The current ratio.

c. The acid-test ratio.

d. The average collection period. (The accounts receivable atthe beginning of last year totaled $280,000.)

e. The average sale period. (The inventory at the beginning oflast year totaled $530,000.)

f. The operating cycle.

g. The total asset turnover. (The total assets at the beginningof last year were $2,510,000.)

h. The debt-to-equity ratio.

i. The times interest earned ratio.

j. The equity multiplier. (The total stockholders’ equity at thebeginning of last year totaled $1,361,000.)

2. For both this year and last year:

a. Present the balance sheet in common-size format.

b. Present the income statement in common-size format downthrough net income.

NB: Please I need all parts to be answered