Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

As loan analyst for Stellar Bank, you have been presented the following information. Toulouse Co. Lautrec Co. Assets Cash $119,000 $307,000 Receivables 212,000 288,000 Inventories

As loan analyst for Stellar Bank, you have been presented the following information.

Toulouse Co.

Lautrec Co.

Assets

Cash

$119,000 $307,000

Receivables

212,000 288,000

Inventories

554,000 495,000

Total current assets

885,000 1,090,000

Other assets

505,000 597,000

Total assets

$1,390,000 $1,687,000

Liabilities and Stockholders Equity

Current liabilities

$313,000 $335,000

Long-term liabilities

390,000 505,000

Capital stock and retained earnings

687,000 847,000

Total liabilities and stockholders equity

$1,390,000 $1,687,000

Annual sales

$974,000 $1,517,000

Rate of gross profit on sales

30 % 40 %

Each of these companies has requested a loan of $50,000 for 6 months with no collateral offered. Because your bank has reached its quota for loans of this type, only one of these requests is to be granted. Compute the various ratios for each company. (Round answer to 2 decimal places, e.g. 2.25.)

Toulouse Co.

Lautrec Co.

Current ratio

enter the ratio rounded to 2 decimal places

: 1

enter the ratio rounded to 2 decimal places

: 1

Acid-test ratio

enter the ratio rounded to 2 decimal places

: 1

enter the ratio rounded to 2 decimal places

: 1

Accounts receivable turnover

enter the accounts receivable turnover rounded to 2 decimal places

times

enter the accounts receivable turnover rounded to 2 decimal places

times

Inventory turnover

enter the inventory turnover rounded to 2 decimal places

times

enter the inventory turnover rounded to 2 decimal places

times

Cash to current liabilities

enter the ratio rounded to 2 decimal places

: 1

enter the ratio rounded to 2 decimal places

: 1

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Blood Audit

Authors: Edward S Blythe

1st Edition

1480180394, 978-1480180390

More Books

Students also viewed these Accounting questions