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 $540,000 long-term loan from Gulfport State Bank, $120,000 of which will be used to bolster the Cash account and $420,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow: Sabin Electronics Comparative Balance Sheet This Year Last Year Assets Current assets: $ 86,000 529,000 960,000 22,000 1,597.000 1,631,600 $3,228,600 $ 190,000 22,000 340,000 635,000 26,000 1, 213,000 1,410,000 $2,623,000 Marketable securities Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Stockholders Equity Liabilities: Current liabilities Bonds payable, 12% Total liabilities Stockholders' equity: Common stock, $15 par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Sabin Electronics Comparative Income Statement and Reconciliation This Year Last Year Sales $ 5,200,000 $4,470,000 Cost of goods sold 3, 915,000 3,490,000 Gross margin 1,285,000 980,000 Selling and administrative expenses 661,000 556,000 Net operating income 624,000 424,000 Interest expense 96,000 96,000 Net income before taxes 528,000 328,000 Income taxes (303) 158, 400 98,400 Net income 369,600 229,600 Common dividends 114,000 93,000 Net income retained 255, 600 136,600 Beginning retained earnings 623,000 486, 400 Ending retained earnings $ 878,600 $ 623,000 $ $ 820.000 800,000 1,620,000 470,000 800,000 1,270,000 730,000 878, 600 1.608.600 $3,228,600 1 730.000 623,000 , 353,000 $2,623,000 This Year Last Year 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: days I days I a. Working capital b. Current ratio c. Acid-test ratio d. Average collection period Average sale period f. Operating cycle g. Total asset turnover Debt-to-equity ratio Times interest earned ratio Equity multiplier days days days 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 $290,000.) (Round your intermediate calculations and final answers to 2 decimal place. Use 365 days in a year.) e. The average sale period. (The inventory at the beginning of last year totaled $540,000.) (Round your intermediate calculations and final answers to 2 decimal place. Use 365 days in a year.) f. The operating cycle. (Round your intermediate calculations and final answers to 2 decimal place. Use 365 days in a year.) g. The total asset turnover. (The total assets at the beginning of last year were $2,540,000.) (Round your answers to 2 decimal places.) h. The debt-to-equity ratio. (Round your answers to 2 decimal places.) i. The times interest earned ratio. (Round your answers to 2 decimal places.) j. The equity multiplier. (The total stockholders' equity at the beginning of last year totaled $1,343,000.) (Round your days In Deb