One of the Banks clients (Earl Grey Golf Corp.) has provided you with their latest Financial Statements. Earl Grey Golf Corporation 2019 and 2020 Statement of Financial Position ASSETS LIABILITIES

2019 2020 2019 2020 CURRENT ASSETS CURRENT LIABILITIES Cash $24,046 $14,255 Accounts Payable $23,184 $14,420 Accounts Receivable 12,448 12,235 Notes Payable 12,000 30,800 Inventory 25,392 39,155 Other 11,571 17,553 TOTAL Current Assets $61,886 $65,645 Total Current Liabilities 46,755 62,773 Long Term Debt $80,000 $105,000 FIXED ASSETS Net Plant & Equipment $324,695 $385,734 OWNERS EQUITY Common Stock $40,000 $40,000 Retained Earnings 219,826 243,606 TOTAL OWNERS EQUITY 259,826 283,606 TOTAL ASSETS $386,581 $451,379 TOTAL Liabilities & OE $386,581 $451,379

Statement of Comprehensive Income 2020 Sales $466,966 Cost of Goods Sold 263,122 Depreciation 32,220 Earnings Before Interest & Tax $171,624 Interest Paid 17,300 Taxable Income $154,324 Taxes (40%) 61,730 Net Income $92,594 Dividends $20,000 Additions to Retained Earnings 72,594

Your boss wants you to do to the following for 2020; 1. Calculate the Following Ratios for both years Balance Sheet ratios and only one year for Income Statement ratios (show all your work); Current Ratio, Quick Ratio, Cash Ratio, Asset Turnover Ratio, Inventory Turnover Receivable Turnover, total Debt ratio, debt to equity ratio, times interest earned ratio, Debt to Equity Multiplier, Profit Margin, Return on Assets and Return on Equity. 2. The client has asked for a $10 million loan. Based on the ratios above which ones do you believe are most important to a bank and why? Make a recommendation (short paragraph) should the bank lend the client the money? Why or Why not