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 $670,000 long-term loan from Gulfport State Bank, $185,000 of which will be used to bolster the Cash account and $485,000 of which will be used to modernize equipment. The companys financial statements for the two most recent years follow:

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 2/10, n/30. All sales are on account.

Assume that Paul Sabin has asked you to assess his companys profitability and stock market performance.

Required:
1.	You decide first to assess the companys stock market performance. For both this year and last year, compute:

2.	You decide next to assess the companys profitability. Compute the following for both this year and last year:

Sabin Electronics Comparative Balance Sheet This Year Last Year Assets Current assets Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses $ 133,000 698,000 1,115,000 34,000 320,000 14,000 470,000 765,000 39,000 Total current assets Plant and equipment, net 1,980,000 2,015,600 1,608,000 1,380,000 Total assets $3,995,600 2,988,000 Liabilities and Stockholders Equity Liabilities Current liabilities Bonds payable, 12% $ 885,000 750,000 470,000 750,000 Total liabilities 1,635,000 1,220,000 Stockholders' equity Common stock, $20 par Retained earnings 860,000 1,500,600 860,000 908.000 1,768,000 $3,995,600 2,988,000 Total stockholders' equity 2,360,600 Total liabilities and equity