2020 annual report for Cisco

	Ratios	2019	Workings	2020	Workings	Formulae
a	Net profit margin	22.4%	11621/51904	22.7%	11214/49301	net income/net sales
b	Return on assets	11.9%	11621/97793	11.8%	11214/94853	net income/total asset
c	Return on equity	30.6%	11621/37920	33.4%	11214/33571	net income/equity
d	Current ratio	1.51	47755/31712	1.72	43573/25331	current assets/current liabilities
It is	Quick ratio	1.46	(47755-1383)/31712	1.67	(43573-1282)/25331	(current assets-inventory)/current liabilities
f	Days in inventory	26 days	365 days/13.91	26 days	365 days/13.74	365days/inventory turnover ratio
g	Days in receivables	39 days	(5491/51904)*365days	41 days	(5472/49301)*365days	(Account receivable/revenue)*365days
h	Days in payables	39 days	(2059/19238)*365days	46 days	(2218/17618)*365days	(Account payable/cost of sales)*365 days
i	Cash conversion cycle	26 days	26+39-39	21 days	26+41-46	f+g-h
j	Liabilities to assets ratio	0.66	64222/97793	0.6	56933/94853	total liabilites/total assets
k	Interest coverage ratio	15.55	14219/859	23.28	13620/585	EBIT/interest expenses

Assume that you work in the corporate credit(loans) department of a bank. The company would like to borrow$1000 million for a period of 5-years from your bank. Based on the ratios in part A and analysis of financial performance of the company, will you extend a loan of $1000 million to the company? Briefly consider the effect of approving the loan on the company's (i) liabilities to assets ratio (ii) interest coverage ratio state your assumptions where appropriate