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 $122,000 $332,000 Receivables 225,000 313,000 Inventories

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

Toulouse Co.

Lautrec Co.

Assets

Cash $122,000 $332,000
Receivables 225,000 313,000
Inventories 564,000 541,000
Total current assets 911,000 1,186,000
Other assets 502,000 638,000
Total assets $1,413,000 $1,824,000

Liabilities and Stockholders Equity

Current liabilities $299,000 $353,000
Long-term liabilities 398,000 502,000
Capital stock and retained earnings 716,000 969,000
Total liabilities and stockholders equity $1,413,000 $1,824,000
Annual sales $964,000 $1,548,000
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 : 1

: 1
Acid-test ratio

: 1

: 1
Accounts receivable turnover

times

times
Inventory turnover

times

times
Cash to current liabilities

: 1

: 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

Management Accounting For Decision Makers

Authors: Dr Peter Atrill, Eddie McLaney

6th Edition

0273731521, 9780273731528

More Books

Students also viewed these Accounting questions