4. Below are the financial statements of Bigtime Inc. for the most previous years. Exhibit 1 Income Statement (In thousands) 2021 2020 2019 Dollars Dollars Dollars Net revenues $ 18,250 $ 15,721 $ 11,806 Costs and expenses: Cost of sales 10,041 7,549 5,670 Research and development 2,016 1,630 1,280 Selling, general and administrative 4,544 4,072 3,196 Goodwill amortization 261 65 19 In process research and devpt. 77 12 121 Total costs and expenses 16,939 13,328 10,266 Operating income 1,311 2,393 1,520 Gain (loss) on strategic investments (90) 208 - Interest income, net 363 170 85 Litigation settlement - - - Income before taxes 1,584 2,771 1,605 Provision for income taxes 603 917 575 Cumulative effect of change in Accounting principle, net (54) - - Net income $ 927 $ 1,854 $ 1,030 Exhibit 2 BIG TIME, INC. Consolidated Balance Sheets (in thousands) 2021 2020 Assets Current assets: Cash and cash equivalents $ 1,472 $ 1,849 Short-term investments 387 626 Accounts receivable, net of allowances of $ 410 in 2021 and $ 534 in 2020 2,955 2,690 Inventories 1,049 557 Deferred tax assets 1,102 673 Prepaid and other current assets 969 482 Total current assets 7,934 6,877 Property, plant and equipment, net 2,697 2,095 Long-term investments 4,677 4,496 Goodwill, net of accumulated amortization of $ 349 in 2001 and $ 88 in 2000 2,041 163 Other assets, net 832 521 Total Assets $ 18,181 $ 14,152 Liabilities and Stockholders Equity Current liabilities: Short-term borrowings $ 3 $ 7 Accounts payable 1,050 924 Accrued payroll-related liabilities 488 751 Accrued liabilities and other 1,374 1,155 Deferred revenues and customer deposits 1,827 1,289 Warranty reserve 314 211 Income taxes payable 90 209 Total current liabilities 5,146 4,546 Deferred income taxes 744 577 Long-term debt and other obligations 1,705 1,720 Total debt $ 7,595 $ 6,843 Commitments and contingencies Common stock and additional paid-in-capital, 7,200 shares authorized; issued: 3,536 shares in 2021 And 3,495 shares in 2020 6,238 2,728 Treasury stock, at cost: 288 shares in 2021 and 301shares in 2020 (2,435) (1,438) Deferred equity compensation (73) (15) Retained earnings 6,885 5,959 Accumulated other comprehensive income (loss) (29) 75 Total stockholders equity 10,586 7,309 Total Liabilities and Equity $ 18,181 $14,152 The company manufactures a clothing line designed for middle and upper class executives. The manager of the company Mr. Wilson went to your bank and applied for a loan to support the growing demand for the product. The manager of the loan department asked you to evaluate the overall financial health of the business as a basis in granting the loan. a. Analyze the financial performance and position of the company using different financial analysis techniques. b. What recommendation are you going to give to the head of the loan department? Support your answer.