CREDIT ANALYSIS. Roberts’ Rug Shop has been in business for 15 years. Sales during 5 consecutive years increased 8 to 10% each year, owing primarily to price increases resulting from inflation. Roberts’ net income for each of the past 5 years is shown below:

REQUIRED:
1. Would you grant the loan? Why or why not?
2. How would classified income statements help you make a decision? l01

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Net income ... 19x2 19x3 19x4 19x5 19x6 $94,000 $78,000 $83,000 $61,000 $72,000 Roberts' applies to your bank for a $250,000 loan, which it plans to use to remodel its store.