Bradburn CorporationBalance SheetMarch $31$

$$

$2026$

$$

$2025$

Assets

Cash

$$18,200$

$$

$$12,500$

Notes receivable

$148,000$

$$

$132,000$

Accounts receivable $($net$)$

$131,800$

$$

$125,500$

Inventories $($at cost$)$

$105,000$

$$

$50,000$

Plant & equipment $($net of depreciation$)$

$1,449,000$

$$

$1,420,500$

Total assets

$$1,852,000$

$$

$$1,740,500$

Liabilities and Stockholders$$ Equity

Accounts payable

$$79,000$

$$

$$91,000$

Notes payable

$76,000$

$$

$61,500$

Accrued liabilities

$9,000$

$$

$6,000$

Common stock $(130,000$ shares, $$10$ par$)$

$1,300,000$

$$

$1,300,000$

Retained earningsa

$388,000$

$$

$282,000$

Total liabilities and stockholders$$ equity

$$1,852,000$

$$

$$1,740,500$

aCash, dividends were paid at the rate of $$1$ per share in fiscal year $2025$ and $$2$ per share in fiscal year $2026.$

Bradburn CorporationIncome Statement For the Fiscal Years Ended March $31$

$$

$2026$

$$

$2025$

Sales revenue

$$3,000,000$

$$

$$2,700,000$

Cost of goods solda

$1,530,000$

$$

$1,425,000$

Gross margin

$1,470,000$

$$

$1,275,000$

Operating expenses

$860,000$

$$

$780,000$

Income before income taxes

$610,000$

$$

$495,000$

Income taxes $(40\%)$

$244,000$

$$

$198,000$

Net income

$ $366,000$

$$

$ $297,000$

aDepreciation charges on the plant and equipment of $$100,000$ and $$102,500$ for fiscal years ended March $31,2025$ and $2026,$ respectively, are included in cost of goods sold.

Instructions

Compute the following items for Bradburn Corporation.

Current ratio for fiscal years $2025$ and $2026.$

Acid$-$test $($quick$)$ ratio for fiscal years $2025$ and $2026.$

Inventory turnover for fiscal year $2026.$

Return on assets for fiscal years $2025$ and $2026.($Assume total assets were $$1,688,500$ at $3/31/24.)$

Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year $2025$ to $2026.$

Identify and explain what other financial reports and$/$or financial analyses might be helpful to the commercial loan officer of Topeka National Bank in evaluating Daniel Brown$$s request for a time extension on Bradburn$$s notes.

Assume that the percentage changes experienced in fiscal year $2026$ as compared with fiscal year $2025$ for sales, cost of goods sold, and operating expenses will be repeated in each of the next $2$ years. Is Bradburn$$s desire to finance the plant expansion from internally generated funds realistic? Discuss.

Should Topeka National Bank grant the extension on Bradburn$$s notes considering Daniel Brown$$s statement about financing the plant expansion through internally generated funds? Discuss.