a) If you were a creditor, could you give short term loan to SPRING company? Give reasons, compare with generally accepted accounting standards, find net working capital and discuss the Five C's of credit.

b) Calculate the operating cycle for the company and evaluate the efficiency of the corporation.

c) How could you evaluate the profitability position of that company?

1PUESTIONS (3) The first three questions are elated with the FALL CoMpany Compute the actual 2013 fnancial ratios listed abeve ith considering industry average a) If gou SPRING Company! Give reasons, compare with generally accepted accounting standard s, find net wor king capitol and discuss the Five C's of cre dit. Cassume a360-day year) creditor, could gou give short term loan to and the company b) Calcula te the operating cyck for evaluate the efficiency of the corporation. E (degor lendimek) eva luate the profitubility position of How could you that company: Balance Sheet FALL Products December 31, 2013 Assets 51,000 Cash Accounts recelvable 4,330 $14.250 Inventories Total current asets Gross xed assets Less Accumulated depreciation Net fixed assets Total assets 535,000 13.250 21.750 $36,000 Liabilities & Stockholders' Equity $ 9,000 6,675 $15,675 4,125 Accounts payable Aceruals Total current liabilities Long-term debt Total liabilities $19,800 1,000 15,200 $16,200 $36,000 Common stock Retained earnings Total stockholders' equity Total liabilities & stockholders equity FALL Products Key Ratios Industry Actual Actual Average 1.3 2012 2013 Current ratio Quick ratio Average collection period Inventory turnover Debt ratio Times interest earned Gross profit margin Net profit margin Retum on total assets Retum on equity 1.0 0.8 0.75 23 days 21.7 30 days 19 64.7% 50% 4,8 5.5 13.6% 12.0% 0.5% 1.0% 2.9% 8.2% 2.0% 4.0% Income Statement FALL Products For the Year Ended December 31, 2013 $100,000 87,000 $13,000 11,000 $ 2,000 Sales revenue Less Cost of goods sold Gross profits Less Operating expenses Operating profits Less Interest expense 500 Net profits before taxes Less Taxes (40%) Net profits after taxes 1,500 600 %24 900 PUESTIONS (3) The first three questions are related with the FALL Compan4- Compute the actural 2013 financial ratios listed above considering industry average cassume with a360-day year) creditor, could you give short term loan to a) If you SPRING Company! Give reasons, compare with generally accep ted accounting standard s, find net capital and discuss the Five C's of were working cre dit. Compute the actual 2013 financial ratios listed above considering industry average with Cassume a360-day year) @) If you were SPRING Company! Give reasons, compare with generally acep ted accounting standard s, find net wor Five C's creditor, could gou give short term loan to corking capital and discuss the C's of cre dit. b) Calcu la te the operating cycle for the company and evaluate the efficiency of the corporation. (degerlendimek) evaluate the profitability position of How could you that company! Bolance sheet Pro ducts December 3,2013 FALL Assets Cash $1.000 5.900 Accounts receiva ble Inventories. 4. 350 $14.2 50 Total current assets. Gross fixed assets $35.000 Less: Accumu lated depre ciation 13 250 Net fixed assets. 21.750 Total a ssets $36.000 Liabilities V stock holders' Equity Accounts payable $ 2.000 Accruals 6.675 Total currnt habilities $15.675 4 125 Long - term debt. Total liabiities $19.800 Common stock 1.00 Re toined eornings- Total stockholders' equity 15.200 $16 200 Totol liabilities & stockholderN equity $ 36. 000 FALL PRODUCTS KEY Ratios Industry hc tucal 2012 Actual 2013 Average 1.3 Current ratio o. 75 Quick ratio Average collection period Inventory turnover. Debt ratio 23 days 21.7 6 h.7 % 30 dogs 12 So % 5.5 4.8 Time interest earned Gross profit margin- Net profit margin- 12.0% 13.6 96 0.5 % 1.0 % 2.0% 2.9% Return on total assets 8.2 % 4.0 % on equity- Re turn state ment Income FALL Products For the Year Ended pecember 31, 2013 $100.000 87.0 00 Sales revenue Less Cost ot goods sold. Grots profits Less: Operating expenses. $ 13.00 O 11. 000 Opera ting profits- Less: Interest expense Net profits before tares Less Taves (40 %). $2.000 Soo $1.500 600 24 900 Net profits afHer taxes