Compute all ratios possible from the financial statements and identify how it affects the decision to approve or deny the loan

EXHIBIT 1: INCOME STATEMENT, APRIL 1 TO MARCH 31 (IN f THOUSANDS) 201213 201314 201415 Sales Cash 200 480 800 Credit 1,800 4,320 7,200 Total sales 2,000 4,800 8,000 Cost of goods sold 1,240 2,832 4,800 Gross profit 760 1,968 3,200 Operating expenses: General, administration, and selling expenses 80 450 1,000 Depreciation 100 400 660 Interest expenses (on borrowings) 60 158 340 Profit before tax (PBT) 520 960 1,200 Tax @ 30% 156 288 360 Profit after tax (PAT) 364 672 840 EXHIBIT 2: BALANCE SHEET (IN ? THOUSANDS) 201213 201314 2014-15 Assets Fixed assets (net of depreciation) 1,900 2,500 4,700 Current assets Cash and cash equivalents 40 100 106 Accounts receivable 300 1,500 2,100 Inventories 320 1,500 2,250 Total 2,560 5,600 9,156 Eguitv & Liabilities Equity share capital (shares of 10 each) 1,200 1,600 2,000 Reserve & surplus 364 1,036 1,876 Long-term borrowings 736 1,236 2,500 Current liabilities 260 1,728 2,780 Total 2,560 5,600 9,156 Irce: Company's audited financial statement. EXHIBIT 3: INDUSTRY AVERAGE OF KEY RATIOS Ratio Sector Average Current ratio 2.30:1 Acid test ratio (quick ratio) 1.20:1 Receivable turnover ratio 7 times Receivable days 52 days Inventory turnover ratio 4.85 times Inventory days 75 days Long-term debt to total debt 24% Debt-to-equity ratio 35% Gross prot ratio 40% Net prot ratio 18% Return on equity 22% Return on total assets 10% Total asset turnover ratio 1.1 Fixed asset turnover ratio 2 Current asset turnover ratio 3 Interest coverage ratio (times 10 interest earned) Working capital turnover ratio 8 Return on xed assets 24%