Answered step by step
Verified Expert Solution
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started