Paragraphh Styles PROBLEM 15 18 Common-Size Statements and Financial Ratios for a Loan Application [LO15 1, LO15 2, L015 3. LO15 4] Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents. Although the company has been fairly profitable, it is now expe- riencing a severe cash shortage. For this reason, it is requesting a $500,000 long-term loan from Gulfport State Bank, $100,000 of which will be used to bolster the Cash account and $400,000 of which will be used to modernize equipment. The company s financial statements for the two most recent years follow Sabn Electronics :; Comparative Balance Sheet This Year Last Year Assets Current assets: Cash Marketable securities Accounts receivable, net :-++,-(+ Inventory Prepaid expenses +ss: % $ 70,000 S 150,000 0 18,000 480,000 300,000 950,000600,000 22,000 1,520,000 1,090,000 1,480,0001370 000 $3,000,000 $2.460,000 20,000 Total current assets Plant and equipment, netx Totalassets Lia bilities and Stockholders Equity Lia bilities ent, net . Current lia bilitie s $ 800,000 430,000