Cookie Creations 18 The balance sheet and income statement of Cookie & Coffee Creations Inc. for its first year of operations, the year ended October 31, 2018, follows.

COOKIE & COFFEE CREATIONS INC. Balance Sheet October 31, 2018
Assets
Current Assets
Cash	$32,219
Accounts receivable	3,250
Inventory	17,897
Prepaid Rent	6,300		$59,666
Property, Plant, and Equipment
Equipment	$99,700
Accumulated depreciationequipment	(9,850	)	89,850
Total assets				$149,516
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$5,848
Income tax payable	18,500
Dividends payable	700
Salaries and wages payable	2,250
Interest payable	188
Note payablecurrent portion	4,000		$31,486
Long-term Liabilities
Note payablelong-term portion	6,000
Total liabilities	37,486
Stockholders' Equity
Paid-in capital
Preferred stock, 2,800 shares issued andoutstanding	$14,000
Common stock, 25,930 shares issued, 25,180 outstanding	25,930		39,930
Retained earnings	72,600
Total paid-in capital and retained earnings	112,530
Less: Treasury stockcommon (750 shares), at cost	(500	)
Total stockholders equity	112,030
Total liabilities and stockholders' equity		$149,516

COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31, 2018
Sales revenue	$462,500
Cost of goods sold	231,250
Gross profit	231,250
Operating expenses
Salaries and wages expense	$92,500
Depreciation expense	9,850
Other operating expenses	35,987	138,337
Income from operations	92,913
Other expenses
Interest expense	413
Income before income tax	92,500
Income tax expense	18,500
Net income	$74,000

Additional information: Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semiannual installment payments of $2,500 on May 1 and November 1 of each year, plus interest of 5% on the outstanding balance. Dividends on preferred stock were $1,250. Since this is the first year of operations and the beginning balances are zero, use the ending balance as the average balance where appropriate.

Calculate the following ratios.(Round all answers to 1 decimal place, e.g. 2.2 or 2.2%.)

1.	Current ratio		:1
2.	Accounts receivable turnover		times
3.	Inventory turnover		times
4.	Debt to assets		%
5.	Times interest earned		times
6.	Gross profit rate		%
7.	Profit margin		%
8.	Asset turnover		times
9.	Return on assets		%
10.	Return on common stockholders' equity		%

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Based on your analysis in above part, do you think a bank would lend Cookie & Coffee Creations Inc. $20,000 to buy the additional equipment? NoYes