Bradburn Corporation was formed five years ago through an initial public offering (IPO) of common shares. Daniel Brown, who owns 15% of the common shares, was one of the organizers of Bradburn and is its current president. The company has been successful, but it is currently experiencing a shortage of funds. On June 10, 2014 Daniel Brown approached the Hibernia Bank, asking for a 24-month extension on two $35,000 notes, which are due on June 30, 2014, and September 30, 2014. Another note of $6,000 is due on March 31, 2015, but he expects no difficulty in paying this note on its due date. Brown explained that Bradburn's cash flow problems are due primarily to the company's desire to finance a $300,000 plant expansion over the next two fiscal years through internally generated funds. The commercial loan officer of Hibernia Bank requested financial reports for the last two fiscal years. These reports are reproduced below.

aDepreciation charges on the plant and equipment of $100,000 and $102,500 for fiscal years ended March 31, 2013 and 2014, respectively, are included in cost of goods sold.
Instructions
(a) Compute the following items for Bradburn Corporation.
1. Current ratio for fiscal years 2013 and 2014.
2. Acid-test (quick) ratio for fiscal years 2013 and 2014.
3. Inventory turnover for fiscal year 2014.
4. Return on assets for fiscal years 2013 and 2014. (Assume total assets were $1,688,500 at 3/31/12.)
5. Percentage change in sales, cost of goods sold, gross margin, and net income after tax from fiscal year 2013 to 2014.
(b) Identify and explain what other financial reports and/or financial analyses might be helpful to the commercial loan officer of Hibernia Bank in evaluating Daniel Brown's request for a time extension on Bradburn's notes.
(c) Assume that the percentage changes experienced in fiscal year 2014 as compared with fiscal year 2013 for sales and cost of goods sold will be repeated in each of the next 2 years. Is Bradburn's desire to finance the plant expansion from internally generated funds realistic? Discuss.
(d) Should Hibernia Bank grant the extension on Bradburn's notes considering Daniel Brown's statement about financing the plant expansion through internally generated funds? Discuss.

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BRADBURN CORPORATION Statement of Financial Position March 31 2014 Assets Cash Notes receivable Accounts receivable (net) Inventories (at cost) Plant and equipment (net of depreciation) Total assets 2013 $18,200 148,000 131,800 105,000 1,449,000 $1,852,000 $12,500 132,000 125,500 50,000 1,420,500 1,740,500 Equity and Liabilities Share capital- common (130,000 shares, $10 par) Retained earnings Accrued liabilities Notes payable Accounts payable Total equity and liabilities $1,300,000 388,000 9,000 76,000 79,000 $1,852,000 $1,300,000 282,000 6,000 61,500 91,000 1,740,500 Cash dividends were paid at the rate of $1 per share in fiscal year 2013 and $2 per share in fiscal year 2014 BRADBURN CORPORATION Income Statement For the Fiscal Years Ended March 31 2014 2013 Sales Cost of goods sold Gross margin Operating expenses Income before income tax Income tax (30%) Net income $3,000,000 1,530,000 $1,470,000 860,000 610,000 183,000 $427,000 $2,700,000 1,425,000 $1,275,000 780,000 495,000 148,500 $346,500