Flag Jim Harrod knew that service, above all, was important to his customers. Jim and Becky Harrod had opened their first store in Omaha, Nebraska in 1997. Harrods carried a full line of sporting goods including everything from baseball bats and uniforms to fishing gear and hunting equipment. By the year 2015, there were twelve Harrod stores producing $5 million in total sales and generating a profit of over $200,000 per year. On the positive side, there was an increasing demand for sporting goods as leisure time activities continued to grow. Also, the state of Nebraska, where all twelve stores were located, was experiencing moderate growth. Finally, there had been a sharp upturn in the last decade for womens sporting goods equipment. This was particularly true of softball uniforms for high school, college, and city league womens teams. Jims wife Becky was one of the top softball players in the city of Omaha, and her extensive contacts throughout the state help to bring in new business. While Nebraska is primarily known as a football state, Omaha actually hosts the college baseball world series each year in June and this generates a lot of interest in baseball (and softball as well). Jim, who had been a walk-on third string offensive tackle at the University of Nebraska (the Cornhuskers in Lincoln, Nebraska), took great pride in his stores as well as his prior university affiliation. He and Becky (also a University of Nebraska graduate in the early 1990s) contributed $2,000 annually to the University of Nebraska athletic program. The growth in the stores was the good news for Jim and Becky. The less than good news was the intense competition that they faced. Not only were they forced to compete with nationally established sporting good stores such as Oshmans and the Academy, but Walmart also represented intense competition for the sporting goods dollar. The national stores were extremely competitive in terms of pricing. However, Jim, Becky and their employees offered great personal service, and they hoped this would allow them to continue with their specialty niche. In January of 2016, Becky, who served as the companys chief financial officer, walked into Jims office and said, Ive had it with the First National Bank of Omaha. It is willing to renew our loan and line of credit, but the bank wants to charge us 2 percentage points over prime. The prime rate is the rate at which banks make loans to their most creditworthy customers. It was 4.75 percent at the time Becky had visited the bank, so that the total rate on the loan would be 7.25 percent. It was not so much the total rate that Becky objected to, as the fact that Harrods was being asked to pay 2 percent over prime. She felt that Harrods was a strong enough company that one percent over prime should be all that the bank required. Her banker told her he would review the firms financial statements with her next week and reconsider the premium Harrods was being asked to pay over prime. While Becky knew the bank crunched all the numbers, she decided to do some additional financial analysis on her own. She had a bachelors degree in finance with a 3.3 GPA. She began by examining Figures 1, 2, and 3. 6. Harrods has a superior sales to total assets ratio compared to the industry. For 2015, compute ratios 4, 6 and 7 as described in the text and compare them to industry data to see why this is so. Write a brief one-paragraph description of the results. Note: for ratio 4, only half the sales are on credit terms.

6.) Harrods has a superior sales to total assets ratio compared to the industry. For 2015, compute ratios 4, 6 and 7 as described in the text and compare them to industry data to see why this is so. Write a brief one-paragraph description of the results. Note: for ratio 4, only half the sales are on credit terms

7.) Conclusion: Based on your analysis in answering Questions 4 and 5, do you think that Becky Harrod has a legitimate complaint about being charged 2 percent over prime instead of one percent over prime? There is no absolute right answer to this question, but use your best judgment.