Crowley Building Supply sells various building materials to retail outlets. The company has just approached Sycamore State Bank requesting a $300,000 loan to strengthen the Cash account and to pay certain pressing short-term obligations. The companys financial statements for the most recent two years follow:

Crowley Building Supply
Comparative Balance Sheets
	This Year		Last Year
Assets
Current assets:
Cash	$	55,000	$	140,000
Marketable securities		0		18,000
Accounts receivable, net		473,000		285,000
Inventory		947,000		587,000
Prepaid expenses		18,000		25,000
Total current assets		1,493,000		1,055,000
Plant and equipment, net		1,638,620		1,543,580
Total assets	$	3,131,620	$	2,598,580
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities	$	803,000	$	442,000
Bonds payable, 8%		615,000		615,000
Total liabilities		1,418,000		1,057,000
Stockholders' equity:
Preferred stock, $25 par, 7%		315,000		315,000
Common stock, $10 par		507,000		507,000
Retained earnings		891,620		719,580
Total stockholders' equity		1,713,620		1,541,580
Total liabilities and stockholders' Equity	$	3,131,620	$	2,598,580

Crowley Building Supply
Comparative Income Statement and Reconciliation
	This Year		Last Year
Sales	$	5,015,000	$	4,357,000
Cost of goods sold		3,866,000		3,430,000
Gross margin		1,149,000		927,000
Selling and administrative expenses		653,000		534,000
Net operating income		496,000		393,000
Interest expense		49,200		49,200
Net income before taxes		446,800		343,800
Income taxes (35%)		156,380		120,330
Net income		290,420		223,470
Dividends paid:
Preferred dividends		22,050		22,050
Common dividends		96,330		60,840
Total dividends paid		118,380		82,890
Net income retained		172,040		140,580
Retained earnings, beginning of year		719,580		579,000
Retained earnings, end of year	$	891,620	$	719,580

During the past year, the company has expanded the number of lines that it carries in order to stimulate sales and increase profits. It has also moved aggressively to acquire new customers. Sales terms are 2/10, n/30. All sales are on account.

Assume that the following ratios are typical of companies in the building supply industry:

Current ratio	2.5
Acid-test ratio	1.2
Average collection period	18	days
Average sale period	50	days
Debt-to-equity ratio	0.75
Times interest earned	6.0
Return on total assets	10	%
Price-earnings ratio	9

Required:

1.	Sycamore State Bank is uncertain whether the loan should be made. To assist it in making a decision, you have been asked to compute the following amounts and ratios for both this year and last year:

a.	Working capital.

b.	Current ratio. (Round your answers to 2 decimal places.)

c.	Acid-test ratio. (Round your answers to 2 decimal places.)

d.	Average collection period. (The accounts receivable at the beginning of last year totaled $252,000.) (Round your intermediate calculations and final answers to 1 decimal place. Use 365 days in a year.)

e.	Average sale period. (The inventory at the beginning of last year totaled $505,000.) (Round your intermediate calculations and final answers to 1 decimal place. Use 365 days in a year.)

f.	Debt-to-equity ratio. (Round your answers to 2 decimal places.)

g.	Times interest earned. (Round your answers to 1 decimal place.)

2.	For both this year and last year:

b.	Present the income statement in common-size form down through net income. (Round your percentage answers to 1 decimal place i.e., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column.)