it was only provided the 2 year information. only the applicable ratios are needed.

Mr. Smith comes to you as a financial analyst to advise you regarding the financial condition of his company PRISM inc. He is considering making a loan to improve the Inventing of merchandise and improvement to the local for $250,000 with a local bank. Financial status continues. The following analysis are required: 1. Ratio Analysis: Make all the possible ratios, with the data offered for the two years. Present the formulas, results with at least four decimal places to convert them to%. Comment and compare the results briefly. a. LIQUIDITY RATIOS i. Current ratio ii. Leverage rate: Composition of current assets vs. Curent assets ii. Leverage rate: Composition of current assets vs. Current liabilities iii. Acid test or Quick ratio b. ACTIVITIES AND EFECIENCIES i. Average Collection period i. Inventory turnover Net Fixed assets turnover iiii. Tot. assets turnover c. Debt ratio d. Long term debt and Total capitalization % e. Time interest earned f. Gross profit margin g. Operating profit margin- EBIT h. Net profit margin i. Operating income returns on investment j. Return on total assets k. Return on Common Equity 2. Common Size Analysis: Express the elements and accounts of the financial statements in percentage terms. Present the results for both years and for the statements for both the Income Statement and the Balance Sheet. Use at least four decimal places to convert them to%. 3. Source and uses of Funds statement: Analysis of accounts of the states for the elaboration of a state of reconciliation of sources and uses of funds. Present changes between accounts classified as Sources (S) or Uses (U) of funds Prepare the state of reconciliation between sources and uses 4. Analyze the loan request. Take a decision. Must show the full calculation of how you got to the number. INCOME STATEMENTS 2017 $15,550,000 7,580,625 $ 7,969,375 2018 $17,750,000 8,793,750 $ 8,956,250 SALES COST OF GOODS SOLD GROSS MARGIN OPERATING EXPENSES $ 2,150,650 $ 1,985,750 1,685,350 500,000 $ 4,500,900 $4,171,100 EARNINGS BEFORE INTEREST AND TAXES $ 4,455,350 $ 3,798,275 1,350,000 3,105,350 $ 2,448, 275 856,896 $ 2,018,478 $ 1,591,379 SELLING EXP. 1,750,250 600,000 |OFFICE EXP. DEPRECIATION TOTAL OPERATING EXPENSES INTEREST EXEPENSE 1,350,000 EARNINGS BEFORE TAXES TAXES 1,086,873 NET INCOME Dividendos declared and paid for the 2018 were $1,5000,000 BALANCE SHEETS ASSETS 2018 2017 CURRENT ASSETS 625,500 1,789,515 CASH 510,625 1,875,125 ACCOUNTS RECEIVABLE MARKETABLE SECURITIES 825,325 2,456,780 825,000 INVENTORIES 2,435,680 S 5,646,43o 5,97,120 TOTAL CURRENTS ASSETS PLANT ASSETS $ 7,100,000 LAND 6,900,000 3,500,000 1,150,000 BUILDING & EQUIPMENTS 3,500,000 1,250,000 LESS DEPRECIATION TOTAL PLANT ASSETS 9,250,000 9350,000 INTAGIBLE ASSETS 612,180 $15,659,300 PATENTS 540,500 $15,436,930 TOTAL ASSETS IABILITIES CURRENT LIABILITIES $ 2,875,000 1,081,797 ACCOUNTS PAYABLE 2,625,350 NOTES PAYABLE 1,275,000 MORTAGAGE CURRENT PORTION 352,555 352,555 $ 4,252,90s 4309,352 TOTAL CURRENT LIABILITIES LONG TERM LIABILITIES MORTAGAGE PAYABLE 4,180,870 4,533,425 TOTAL LIABILITIES STOCKHOLDERS EQUITY COMMON STOCKS 3,100,000 950,000 3,100,000 - PAID IN CAPITAL C-STOCKS RETAINED EARNINGSS 3,119,078 2,600,600 6,650,600 $15,A36,93s0 TOTAL STOCKSHOLDERS EQUITY 7,169,078 $15,659,300 TOTAL LIAB & STOCKSHOLDERS EQUITY OTHER DATA: INDUSTRIES RATIOS CURRENT RATIO Lr1 INDUSTRIES AVERAGE 1.60 TIMES $0.65 $0.74 $1.10 ACID TEST RATIO AVERAGE COLLEGTIO PERIOD INVENTORY TURN OVER DEBTS TO TOTAL ASSETS LONG TERM DEBTS TO TOTAL CAPITALIZATION TIMES INTEREST EARNED GROSS PROFIT MARGIN OPERATING PROFIT MARGIN (EBIT) NET PROFIT MARGIN TOTAL ASSETS TURN OVER FIXED ASSETS TURN OVER OPERATING INCOME RETURN ON INVESTMENT (EBIT) RETURN ON TOTAL ASSETS RETURN ON COMMON EQUITY 30 DAYS 4.5 TIMES 60% 40% 4 TIMES 23.25% 12.50% 1.0 TIMES 1.5 TIMES 24.35% 15% 22.25% REQUIRED 1. RATIO ANALYSIS 2. COMMON SIZE ANALYSIS 3. SOURCES AND USES OF FUNDS STATEMENT 4. ANALYZE THE LOAN REQUEST. TAKE DECISION