Joseph Berio is a loan officer with the First Bank of Tennessee. Red Brick, Inc., a major producer of masonry products, has applied for a short-term loan. Red Brick supplies building material throughout the southern states, with brick plants located in Tennessee, Alabama, Georgia, and Indiana. The firm's income statement and balance sheet are given below. The third table presents both a ratio analysis of Red Brick's previous year's financial statements and the industry averages of the ratios. Red Brick Income Statement (for the period ending December 12/31/20X1) $218,000,000 124,000,000 25,000,000 69,000,000 6,000,000 200,000 $ 62,800,000 Sales Cost of goods sold Administrative expenses Operating income Interest expense Taxes Net income Red Brick Balance Sheet as of 12/31/20x2 Assets Cash Accounts receivable Inventory Plant and equipment Liabilities and Stockholders Equity 800,000 Accounts payable 45,000,000 11,000,000 51,000,000 29,000,000 Stockholders equity 134,400,000 241,400,000 32,000,000 Notes payable 79,600,000 Long-term debt $241,400,000 90% of sales are on ced Previous year's invenory a $58 000.000 Company's Ratios Industry (Previous Year) Average Current ratio Quick ratio Inventory turnover Average collest 1.8: 0.6:1 5.2x 2.2:1 0.7:1 4.7x O Type here to search