Crane Corporation was formed five years ago through an initial public offering (IPO) of common shares. Daniel Brown, who owns 15% of the common shares, was one of the organizers of Crane and is its current president. The company has been successful, but it is currently experiencing a shortage of funds. On June 10, 2020, Daniel Brown approached the Hibernia Bank, asking for a 24-month extension on two $35,300 notes, which are due on June 30, 2020, and September 30, 2020. Another note for $6,600 is due on March 31, 2021, but he expects no difficulty in paying this note on its due date. Brown explained that Crane's cash flow problems are due primarily to the company's desire to finance a $298,000 plant expansion spent evenly over the next two fiscal years through internally generated funds. The plant expansion will be used in operations following the completion of the construction in 2023. The commercial loan officer of Hibernia Bank requested financial reports for the past two fiscal years. These reports are reproduced below.

Cash $18,680 $12,700 Notes receivable 147,520 136,400 Accounts receivable (net) 132,040 122,300 Inventories (at cost) 106,920 50,400 Plant and equipment (net of depreciation) 1,446,800 1,444,000 Total assets $1,851,960 $1,765,800 Equity and Liabilities Share capital-common (126,000 shares Issued) $1,260,000 $1,260,000 Retained earnings (note 1) 388,040 274,000 Accrued llabllltles 9,160 5,920 Notes payable (current) 77,200 61,680 Accounts payable 117,560 164,200 Total equity and liabilities $1,851,960 $1,765,800 Note 1: Cash dividends were paid at the rate of $1 per share in fiscal year 2019 and $2 per share in fi CRANE CORPORATION Income Statement For the Fiscal Years Ended March 31 2020 2019 Sales $3,002,200 $2,699,000 Cost of goods sold (note 2) 1,530,600 1,427,000 Gross margin $1,471,600 $1,272,000 Operating expenses 860,000 778,000 Income before Income tax $611,600 $494,000 Income tax (30%) 183,480 148,200 Net Income $428,120 $345,800 Note 2: Depreciation charges on the plant and equipment of $102,000 and $104,550 for fiscal years 2020, respectively, are Included in cost of goods sold. Additional Information: 2020 2019 1. Cash flows from operating activities $459,000 $350,000 2. Capital expenditures for the year 128,000

110,000

1. Earnings per share for fiscal years 2019 and 2020. Round to the nearest cent

.2. Payout ratio for fiscal years 2019 and 2020. Round to one decimal place. 7. Debt to total assets for fiscal years 2019 and 2020. Round to one decimal place.