Financial Reporting And Analasis

Balance Sheets December 31, 2004 and 2003 2003 2004 2003 $ $ 8,173 3,517 3,750 3,000 18,440 4,200 375 1,579 5,386 11,540 4,752 15 1,149 4,722 10,638 2004 Assets Current assets: Cash.... $ 12,597 Short-term investments 5,003 Accounts receivable.. 2,315 Prepaid Rent... 3.000 Total current assets 22,915 Property, plant and equipment: Land and building. 65,553 Machinery and equipment.. 5.000 70,553 Less accumulated depreciation.... 5.775 Property and equipment, net........ 64,778 Long-term investments. 1,353 Other assets. 283 Total assets $ 89.329 Liabilities Current liabilities: Note payable... Accounts payable Accrued wages. Taxes payable Total current liabilities Long-term debt. Owner's Equity Total owners' equity...... Total liabilities and owners' equity $ 50,000 20,000 27,789 20,159 28,369 3,511 31,880 4,321 27,559 4,587 211 50,797 89,329 $ 50,797 $ Requirement: 1) If this company is asking for loan amount for 8 months, which ratio bank should use to evaluate the paying abilities of this firm? 2) Calculate current ratio, quick ratio 3) Calculate debt ratio, debt to equity ratio and interpret the calculated values