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 $630,000 long-term loan from Gulfport State Bank, $165,000 of which will be used to bolster the Cash account and $465,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow: During the past year, the company introduced severol new product lines and raised the selling prices on a number of old product lines n order to improve its profit margin. The company also hired a new sales manager, who has expanded sales into several new territories. Soles terms are 2/10, 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: 3. The current ratio. b. The acid-test ratio. c. The average collection period. (The accounts receivable at the beginning of last year totaled $380,000.) c. The average sale period. (The inventory at the beginning of last year totaled $630,000.) 2. The debt-to-cquity ratio. 2. For both this year and last year: Present the income statement in common-size format down through net income for both this year and last yeak, Complete this question by entering your answers in the tabs below. e. The debt-to-equity ratio. 2. For both this year and last year: Present the income statement in common-size format down through net income for both this year and last year. Complete this question by entering your answers in the tabs below. To assist in approaching the bank about the loan, Paul has asked you to compute the following ratios for both this year an last year: a. The current ratio. (Round your airswers to 2 decimal places.) b. The acid-test ratio. (Round your answers to 2 decimal places.) c. The average collection period. (The accounts recelvable at the beginning of last year totaled $380,000.) (Round your intermediate calculations and final answers to 2 decimal place. Use 365 days in a year.) d. The average sale period. (The inventory at the beginning of last year totaled $630,000.))(Roundyourintermediate calculations and final answers to 2 decimal place. Use 365 days in a year.) e. The debt-to-equity ratio. (Round your answers to 2 decimal places.) e. The debt-to-equity ratio. 2. For both this year and last year: Present the income statement in common-size format down through net income for both this year and last year. Complete this question by entering your answers in the tabs below. Present the income statement in common-size format down through net income for both this year and last year. (Round your answers to 1 decimal place.)
