ACC 122-Financial Analysis Please type your answers and submit a hard copy at the beginning of the class on Tuesday, Oct 2, 2018 Crown Lighting, Inc., which manufactures electric lighting and writing equipment, has been in business five years. The company has had modest profits and has experienced few operating difficulties until this year, when president John Stone discusses his company's working capital problems with you, a loan officer at Empire Bank. Stone explains that expanding his firm has created difficulties in meeting obligations when they come due and in taking advantage of cash discounts offered by manufacturers for timely payment. He would like to borrow $75,000 from Empire Bank. At your request, Stone submits the following financial data for the past two years: This Year Last Year Net Sales Cost of Goods Sold Net income (after income taxes) Dividends Depreciation December 31, 20x1 data: $1,500,000 900,000 47,500 20,000 100,000 $1,200,000 800,000 42,000 15,000 120,000 Total Assets Total Stockholders' Equity Accounts Receivable Inventory 720,000 320,000 152,500 262,500 Crown Lighting, Inc. Balance Sheet December 31, 20x3 This Year December 31, 20x2 Last Year Assets: Cash Accounts Receivable Inventory Prepaid Expenses $50,000 230,000 420,000 $ 30,500 167,500 297,500 Total Current Assets 710,000 500,500 $ 349,500 $ 850,000 Plant Assets (net) 360 TOTAL ASSETS S 1,070,000 Liabilities and Stockholders' Equity Notes Payable - Banks Accounts Payable Income Tax Payable Accrued Liabilities 60,000 252,000 3,000 $ 65,000 380,000 35,000 195,000 2,500 $ 45,000 277,500 Total Current Liabilities 10% Mortgage Payable 180 Total Liabilities Common Stock Retained Earnings $ 600,000 400,000 350,000 Total Stockholders Equity TOTAL LIABILITIES AND STOCKHOLDERS STOCKHOLDERS EQUITY $1,070,000