Malik Info. Services Inc. (MISI) requested a $300.000 long-term loan at your bank. As a Credit analyst, you have been directed by your manager to review the following data submitted with MISI's Hoan application: Calculation for 2020 Value Calculation for 2019 Value Type of Ratio Trend M 1 Current Ratio Numerator Denominator Ratio 2020 39,100 27,500 11,600 2019 36,333 26,500 9,833 2 Debt to Assets Numerator Denominator Ratio Sales Revenue Cost of goods sold Gross profit Operating expenses: Administrative expenses Selling expenses Income from Operations Interest expense Income before tax Income tax expense Net income 3,750 3,950 3,923 3,880 3,797 950 3 Return on CSH Equity 2,133 535 1,598 528 1,070 Numerator Denominator Ratio 2,847 658 2,189 4 Profit Margin Numerator Denominator Ratio 2020 2019 2020 2019 2018 5 Times Interest Earned Current Assets Cash Short term investments Account receivable Inventory Total Current Assets Non-Current Assets 394 355 6,176 3,291 10,216 595 350 6,492 3,401 10,838 2018 Current Liabilities Account payable Notes payable - Short term 5,880 Accrued liabilities 3,160 Income Tax Payable Total Current Liabilities Non-Current Liabilities 5,210 5,140 785 240 11,375 2,560 5,825 815 210 9,410 Numerator Denominator Ratio 3,160 6 Inventory Turnover Numerator Denominator Denominator Ratio 8,750 Non-Current Liabilities Notes Payable - Long term - Total Liabilities 4,757 8,211 19,586 6,000 15,410 Non-Current Assets Long-Term investments Property, Plant and Equipment Property, Plant and Equipment (PPE) Less: Accum. Depreciation - PPE Property, Plant and Equipment 7 Should the loan be granted? Why? 45,000 12,600 32.400 42,500 9,300 33,200 Shareholders' Equity Common Shares Retained earnings Total shareholders' Equity Total Liabilities & Shareholders' Equity Goodwill Total Assets 15,000 18,900 33,900 53,486 2,120 16,000 19.505 35,505 32,500 50,915 2,120 50,915 53,486 Instructions: From MISI's financial statements above, calculate the ratios included on the right hand side for both 2020 and 2019. State ratio category (liquidity, solvency or profitability) and explain the trend from 2019 to 2020 (is the company doing better or worse in 2020?). Place your calculations in the shaded cells to the right of the data table. After analyzing the data, state whether you would grant the loan to MISI and why. When completed, copy your results to the solution box in WileyPlus. (20 marks)