1. compute and analyze the trend analysis of the company.
2. What are the various ratios computed to analyze the financial statements?
3. Based on these ratios and their comparisons with industry ratios, would you, as the loan officer, grant the loan request?
4. What areas of improvement can you suggest for the future?

EXHIBIT 1: INCOME STATEMENT, APRIL 1 TO MARCH 31 (IN THOUSANDS) EXHIBIT 2: BALANCE SHEET (IN THOUSANDS) I \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ Cash flow statement } \\ \hline \multicolumn{4}{|c|}{ In Thousands } \\ \hline & 201213 & 2013-14 & 2014-15 \\ \hline \multicolumn{4}{|l|}{ Cash Flow from Operating Activities: } \\ \hline Net Income & $364.00 & $672.00 & $840.00 \\ \hline Depreciation & $100.00 & $400.00 & $660.00 \\ \hline Adjusted Net Income & $464.00 & $1,072.00 & $1,500.00 \\ \hlineA/R & & ($1,200.00) & ($600.00) \\ \hline Inventories & & ($1,180.00) & ($750.00) \\ \hline Current Liabilities & & $1,468.00 & $1,052.00 \\ \hline Cash from Operating Activities & & $160.00 & $1,202.00 \\ \hline \multicolumn{4}{|l|}{ Cash Flows from Investing Activities: } \\ \hline Purchase of Assets & & ($1,000.00) & ($2,860.00) \\ \hline Cash Used in Investing Activities & & ($1,000.00) & ($2,860.00) \\ \hline \multicolumn{4}{|l|}{ Cash Flows from Financing activities } \\ \hline Borrowings & & $500.00 & $1,264.00 \\ \hline Shares Issued & & $400.00 & $400.00 \\ \hline Cash Generated from Financing Activities & & $900.00 & $1,664.00 \\ \hline Net Cash Generated & & $60.00 & $6.00 \\ \hline Add:Beginning cash balance & & $40.00 & $100.00 \\ \hline Ending Cash Balance & & $100.00 & $106.00 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{7}{|c|}{ Comon Size Income statement } \\ \hline & 201213 & % to Total sales & 2013-14 & % to Total sales & 201415 & % to Total sales \\ \hline \multicolumn{7}{|l|}{ Sales } \\ \hline Cash & $200.00 & 10.00% & $480.00 & 10.00% & $800.00 & 10.00% \\ \hline Credit & $1,800.00 & 90.00% & $4,320.00 & 90.00% & $7,200.00 & 90.00% \\ \hline Total Sales & $2,000.00 & 100.00% & $4,800.00 & 100.00% & $8,000.00 & 100.00% \\ \hline COGS & $1,240.00 & 62.00% & $2,832.00 & 59.00% & $4,800.00 & 60.00% \\ \hline Gross profit & $760.00 & 38.00% & $1,968.00 & 41.00% & $3,200.00 & 40.00% \\ \hline \multicolumn{7}{|l|}{ Operating Expenses: } \\ \hline Gen.adm.\& sell.exp. & $80.00 & 4.00% & $450.00 & 9.38% & $1,000.00 & 12.50% \\ \hline Depreciation & $100.00 & 5.00% & $400.00 & 8.33% & $660.00 & 8.25% \\ \hline Int.exp.(on borrowings) & $60.00 & 3.00% & $158.00 & 3.29% & $340.00 & 4.25% \\ \hline Profit before tax (PBT) & $520.00 & 26.00% & $960.00 & 20.00% & $1,200.00 & 15.00% \\ \hline Tax at 30% & $156.00 & 7.80% & $288.00 & 6.00% & $360.00 & 4.50% \\ \hline Profit after tax (PAT) & $364.00 & 18.20% & $672.00 & 14.00% & $840.00 & 10.50% \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{6}{|c|}{ Common Size Balance Sheet } & \multirow[b]{2}{*}{% to Total } \\ \hline Assets & & \% to Total & & % to Total & & \\ \hline Fixed Assets (Net of Depreciation) & 1900 & 74.22% & 2500 & 44.64% & 4700 & 51.33% \\ \hline \multicolumn{7}{|l|}{ Current assets } \\ \hline Cash \& Cash equivalents & 40 & 1.56% & 100 & 1.79% & 106 & 1.16 \\ \hline \begin{tabular}{|l|} Accounts Receivables \\ \end{tabular} & 300 & 11.72% & 1500 & 26.79% & 2100 & 22.94% \\ \hline Inventories & 320 & 12.50% & 1500 & 26.79% & 2250 & 24.57% \\ \hline Total & 2560 & 100.00% & 5600 & 100.00% & 9156 & 100.00% \\ \hline \multicolumn{7}{|l|}{ Equity \& Liabilities } \\ \hline Equity share capital(\$ 10) & 1200 & 46.88% & 1600 & 28.57% & 2000 & 21.84% \\ \hline Reserves \& surplus & 364 & 14.22% & 1036 & 18.50% & 1876 & 20.49% \\ \hline Long-termborrowings & 736 & 28.75% & 1236 & 22.07% & 2500 & 27.30% \\ \hline \begin{tabular}{|l|} Current Liabilities \\ \end{tabular} & 260 & 10.16% & 1728 & 30.86% & 2780 & 30.36% \\ \hline Total & 2560 & 100.00% & 5600 & 100.00% & 9156 & 100.00% \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|} \hline Ratio Analysis & & 201213 & 2013-14 & 201415 & Industry average \\ \hline & Current assets & 660 & 3100 & 4456 & \\ \hline & Current Liabilities & 260 & 1728 & 2780 & \\ \hline Current ratio & & 2.54 & 1.79 & 1.60 & 2.3:1 \\ \hline \multirow[t]{3}{*}{ Quick Ratio } & Current assets & 660 & 3100 & 4456 & \\ \hline & Inventory & 320 & 1500 & 2250 & \\ \hline & Current Liabilities & 260 & 1728 & 2780 & \\ \hline Quick Ratio & & 1.31 & 0.93 & 0.79 & 1.20:1 \\ \hline Receivables T.O.Ratio (Times) & & 6.00 & 4.80 & 4.007 & 7 times \\ \hline & & & & & \\ \hline Receivable Turnover Days & & 61 & 76 & 91 & 52 Days \\ \hline Inventory T.O. Ratio (Times) & COGS/Av.Inventory & 3.88 & 3.11 & 2.56 & 4.85 times \\ \hline & & & & & \\ \hline Inventory Turnover Days & 365/.T.O. & 94 & 117 & 143 & 75 days \\ \hline Long-Term Debt to Total Debt & LTDebt/Total debt & 73.90% & 41.70% & 47.35% & 24% \\ \hline Debt to Equity Ratio & Debt/equity & 61.33% & 77% & 125% & 35% \\ \hline Gross Profit Ratio & Gross Profit/sales & 38% & 41% & 40% & 40% \\ \hline & & & & & \\ \hline Net Profit Ratio & Net Profit/Sales & 18.2% & 14.0% & 10.5% & 18% \\ \hline Return on equity & Net Profit/Total Equity & 23.27% & 25.49% & 21.67% & 22% \\ \hline Return on Total assets & Net Profit/Total Assets & 14.22% & 12.00% & 9.17% & 10% \\ \hline Total Asset Turnover ratio & Sales/Total assets & 0.78 & 0.86 & 0.87 & 1.1 \\ \hline & & & & & \\ \hline Fixed assets turnover ratio & Sales/GrossFixedassets & 1 & 1.6 & 1.37 & 2 \\ \hline Current assets T.O.Ratio & Sales/Current assets & 3.03 & 1.55 & 1.80 & 3 \\ \hline \end{tabular}