$13$

These two companies are in the same business and state but different cities. Each company has been in operation for about $10$ years.

Both companies received an unqualified audit opinion on the financial statements. Thor Company wants to borrow $$109,000$ and

Gunnar Company is asking for $$40,000.$ The loans will be for a two$-$year period. Neither company issued stock in the current year.

Assume the end$-$of$-$year total assets and net equipment balances approximate the year's average and all sales are on account.

$02$:$07$:$09$

Required:

Calculate the following ratios. $($Use $365$ days in a year. Round your intermediate calculations and final answers to $2$ decimal places.$)$

$\backslash$table$[[-,\backslash$table$[[$Thor$],[$Company$]],,\backslash$table$[[$Gunnar$],[$Company$]],],[$Tests of Profitability:,,,,$],[1.$ Net Profit Margin,,$\%,,\%$Balance Sheet

Cash $ $39,000$ $ $36,000$

Accounts Receivable, Net $81,00032,000$

Inventory $162,00038,000$

Equipment, Net $778,000200,000$

Other Assets $200,00072,400$

Total Assets $ $1,260,000$ $ $378,400$

Current Liabilities $ $176,000$ $ $26,000$

Notes Payable $($long$-$term$)(12\%$ interest rate$)274,00074,000$

Common Stock $($par $$20)676,000256,000$

Additional Paid$-$In Capital $74,0008,800$

Retained Earnings $60,00013,600$

Total Liabilities and Stockholders$$ Equity $ $1,260,000$ $ $378,400$

Income Statement

Sales Revenue $ $1,132,000$ $ $348,000$

Cost of Goods Sold $676,000184,000$

Other Expenses $340,000118,000$

Net Income $ $116,000$ $ $46,000$

Other Data

Per share price at end of year $ $13\mathrm{.}00$ $ $30\mathrm{.}00$

Selected Data from Previous Year

Accounts Receivable, Net $ $69,800$ $ $31,200$

Inventory $137,00049,600$

Equipment, Net $778,000200,000$

Notes Payable $($long$-$term$)(12\%$ interest rate$)274,00074,000$

Total Stockholders$$ Equity $810,000278,400$