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 experiencing a severe cash shortage. For this reason, it is requesting a $590,000 long-term loan from Gulfport State Bank, $145,000 of which will be used to bolster the Cash account and $445,000 of which will be used to modernize equipment. The companys financial statements for the two most recent years follow: Sabin Electronics Comparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 104,000 $ 240,000 Marketable securities 0 27,000 Accounts receivable, net 594,000 390,000 Inventory 1,035,000 685,000 Prepaid expenses 26,000 31,000 Total current assets 1,759,000 1,373,000 Plant and equipment, net 1,751,000 1,420,000 Total assets $ 3,510,000 $ 2,793,000 Liabilities and Stockholders Equity Liabilities: Current liabilities $ 845,000 $ 520,000 Bonds payable, 12% 700,000 700,000 Total liabilities 1,545,000 1,220,000 Stockholders' equity: Common stock, $15 par 960,000 960,000 Retained earnings 1,005,000 613,000 Total stockholders equity 1,965,000 1,573,000 Total liabilities and equity $ 3,510,000 $ 2,793,000 Sabin Electronics Comparative Income Statement and Reconciliation This Year Last Year Sales $ 5,450,000 $ 4,620,000 Cost of goods sold 3,965,000 3,540,000 Gross margin 1,485,000 1,080,000 Selling and administrative expenses 671,000 566,000 Net operating income 814,000 514,000 Interest expense 84,000 84,000 Net income before taxes 730,000 430,000 Income taxes (30%) 219,000 129,000 Net income 511,000 301,000 Common dividends 119,000 98,000 Net income retained 392,000 203,000 Beginning retained earnings 613,000 410,000 Ending retained earnings $ 1,005,000 $ 613,000 During the past year, the company introduced several new product lines and raised the selling prices on a number of old product lines in order to improve its profit margin. The company also hired a new sales manager, who has expanded sales into several new territories. Sales terms are 3/10, n/30. All sales are on account. Required: 1. To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year and last year: a. The amount of working capital. b. The current ratio. (Round your answers to 2 decimal places.) c. The acid-test ratio. (Round your answers to 2 decimal places.) d. The average collection period. (The accounts receivable at the beginning of last year totaled $340,000.) (Round your intermediate calculations and final answers to 1 decimal place. Use 365 days in a year.) e. The average sale period. (The inventory at the beginning of last year totaled $590,000.) (Round your intermediate calculations and final answers to 1 decimal place. Use 365 days in a year.) f. The operating cycle. (Round your intermediate calculations and final answer to 1 decimal place.) g. The total asset turnover. (The total assets at the beginning of last year were $2,690,000.) (Round your answers to 2 decimal places.) h. The debt-to-equity ratio. (Round your answers to 3 decimal places.) i. The times interest earned ratio. (Round your answers to 1 decimal place.) j. The equity multiplier. (The total stockholders equity at the beginning of last year totaled $1,563,000.) (Round your answers to 2 decimal places.)