For the purpose of obtaining a loan, a company has furnished attached financial information for last 2 years. [Assume that the financial statements are duly audited without any adverse comment.]

Conduct a complete analysis of the information, comment on the results of your analysis and advise if you will grant the loan.

[Note: Prepare common size statements and calculate the requested ratios. Show all your workings.]

Income Statement 2019 2018 Sales 22,557 19,889 Cost of goods sold 15,989 13,205 Operating expenses 2,209 2,100 Depreciation 804 903 Interest expense 105 110 Income tax expense 800 823 Net income (EAT) 2,650 2,748 Balance Sheet 2019 2018 Assets Inventory 4,848 4,409 Accounts Receivables 3,235 3,199 Cash 2,309 3,088 Non-current assets 7,356 7,798 17,748 18,494 Total assets Liabilities Accounts payable 9,602 8,687 Non-current 2,500 2,000 12,102 10,687 Total liabilities Owners' equity Share capital (10,000 shares) 5,000 5,000 Retained earnings 646 2,807 Total owners' equity 5,646 7,807 Total liabilities+Owners' equit 17,748 18,494 Market value of share $0.74 $0.78