been stuck on this for awhile need help solving please

You have just been hired as a loan officer at Fairfield State Bank. Your supervisor has given you a file containing a request from Hedrick Company, a manufacturer of auto components, for a $1,000,000 fiveyear loan. Financial statement data on the company for the last two years are given below: Hedrick Company Comparative Balance Sheet This Year Assets Current assets: Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses $ Total current assets Plant and equipment, net Total assets Liabilities and Stockholders' Equity Liabilities: Current liabilities Bonds payable, 10% $ 416,000 0 105,000 891,000 596,000 1,400,000 89,000 710,000 69,000 2,710,000 1,896,000 3,252,200 3,151,100 $ 5,962,200 $ 5,047,100 $ 1,290,000 $ 880,000 Total liabilities Stockholders' equity: Preferred stock, 8%, $30 par value Common stock, $40 par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 330,000 Last Year $ 1,170,000 1,070,000 2,460,000 1,950,000 600,000 600,000 2,000,000 2,000,000 902,200 497,100 3,502,200 3,097,100 5,962,200 $ 5,047,100 Hedrick Company Comparative Income Statement and Reconciliation This Year Last Year Sales (all on account) $ 5,410,000 $ 4,210,000 Cost of goods sold 4,010,000 3,280,000 Gross margin Selling and administrative expenses 1,400,000 930,000 510,000 500,000 890,000 117,000 430,000 107,000 773,000 323,000 231,900 96,900 541,100 226,100 Dividends paid: Preferred stock Common stock 48,000 88,000 48,000 44,000 Total dividends paid 136,000 92,000 Net income retained Retained earnings, beginning of year 405,100 134,100 497,100 363,000 Net operating income Interest expense Net income before taxes Income taxes (30%) Net income Retained earnings, end of year $ 902,200 $ 497,100 Marva Rossen, who just two years ago was appointed president of Hedrick Company, admits that the company has been \"inconsistent\" in its performance over the past several years. But Rossen argues that the company has its costs under control and is now experiencing strong sales growth, as evidenced by the more than 28% increase in sales over the last year. Rossen also argues that investors have recognized the improving situation at Hedrick Company, as shown by the jump in the price of its common stock from $33 per share last year to $49 per share this year. Rossen believes that with strong leadership and with the modernized equipment that the $1,000,000 loan will enable the company to buy, profits will be even stronger in the future. Anxious to impress your supervisor, you decide to generate all the information you can about the company. You determine that the following ratios are typical of companies in Hedrick's industry: Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned Price-earnings ratio 2.3 1.2 31 days 60 days 9.5 % 0.65 5.7 10 Required: 1. You decide first to assess the rate of return that the company is generating. Compute the following for both this year and last year: a. The return on total assets. (Total assets at the beginning of last year were $4,410,000.) (Round your answers to 1 decimal place.) This year Last year % Return on total assets % b. The return on common stockholders' equity. (Stockholders' equity at the beginning of last year totaled $3,885,368. There has been no change in preferred or common stock over the last two years.)(Round your intermediate calculations to whole numbers and final answer to 1 decimal place) This year Last year % Return on common stockholders' equity % c. Is the company's financial leverage positive or negative? This year (Click to select) Last year (Click to select) 2. You decide next to assess the well-being of the common stockholders. For both this year and last year, compute: a. The earnings per share. (Round your answers to 2 decimal places.) Earnings per share This year $ Last year $ b. The dividend yield ratio for common stock. (Round your intermediate calculations to 2 decimal places and final answers to 1 decimal place.) This year Dividend yield ratio Last year % % c. The dividend payout ratio for common stock. (Round your intermediate calculations to 2 decimal places and final answers to 1 decimal place.) This year Last year % Dividend payout ratio % d. The price-earnings ratio. (Round your intermediate calculations to 2 decimal places and final answers to 1 decimal place.) This year Last year times Price-earnings ratio times e. The book value per share of common stock. (Round your answers to 2 decimal places.) Book value per share This year $ Last year $ f. The gross margin percentage. (Round your answers to 1 decimal place.) This year Last year % Gross margin percentage % 3. You decide, finally, to assess creditor ratios to determine both short-term and long-term debt paying ability. For both this year and last year, compute: a. Working capital. Working capital This year $ Last year $ b. The current ratio. (Round your answers to 2 decimal places.) This year Last year Current ratio c. The acid-test ratio. (Round your answers to 2 decimal places.) This year Last year Acid-test ratio d. The average collection period. (The accounts receivable at the beginning of last year totaled $527,000.) (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and final answers to the nearest whole number.) This year Last year days Average collection period days e. The average sale period. (The inventory at the beginning of last year totaled $720,000.) (Use 365 days in a year.Round your intermediate calculations to 2 decimal places and final answers to the nearest whole number.) This year Average sale period Last year days days f. The debt-to-equity ratio. (Round your answers to 2 decimal places.) This year Last year Debt-to-equity ratio g. The times interest earned. (Round your answers to 1 decimal place.) This year Times interest earned Last year 1 a Return on total assets This year b Return on Common equity c Debt to equity Financial leverage This year Last year Last year 9.8% 4.8% 541100 5047100 226100 5047100 18.3% 6.2% 493100 2902200 178100 3285368 0.70 0.63 9.86 $ 3.56 493100 178100 3.6% 2.7% 1.76 0.88 17.8% 24.7% 5.0 9.3 Negative Positive 2 a EPS $ b Dividend yield c Dividend payout d PE ratio e Book value per common stock $ f Gross Margin 58.04 $ 25.9% 50000 50000 49.94 22.1% 3 a Working capital $ 1,420,000 $ 1,016,000 b Current Ratio 2.10 2.15 c Acid test ratio 0.95 1.27 50 49 d Avg collection period e 1221 5410000 4210000 891000 596000 Avg sales period f Debt to equity g Times interest earned 96 80 0.70 0.63 7.6 4.0 4010000 1400000 3280000 710000 5962200 11009300 5504650 4410000 9457100 4728550 2497100 5399300 2699650 2497100 5782468 2891234 0.946512 1117 1.269318 596000 1487000 527000 1123000 743500 561500 710000 2110000 1055000 720000 1430000 715000 1 a Return on total assets This year b Return on Common equity c Debt to equity Financial leverage This year Last year Last year 9.8% 4.8% 541100 5047100 226100 5047100 18.3% 6.2% 493100 2902200 178100 3285368 0.70 0.63 9.86 $ 3.56 493100 178100 3.6% 2.7% 1.76 0.88 17.8% 24.7% 5.0 9.3 Negative Positive 2 a EPS $ b Dividend yield c Dividend payout d PE ratio e Book value per common stock $ f Gross Margin 58.04 $ 25.9% 50000 50000 49.94 22.1% 3 a Working capital $ 1,420,000 $ 1,016,000 b Current Ratio 2.10 2.15 c Acid test ratio 0.95 1.27 50 49 d Avg collection period e 1221 5410000 4210000 891000 596000 Avg sales period f Debt to equity g Times interest earned 96 80 0.70 0.63 7.6 4.0 4010000 1400000 3280000 710000 5962200 11009300 5504650 4410000 9457100 4728550 2497100 5399300 2699650 2497100 5782468 2891234 0.946512 1117 1.269318 596000 1487000 527000 1123000 743500 561500 710000 2110000 1055000 720000 1430000 715000