P-M-I CHART Instruction: Respond to the scenario below by using the P-M-I Chart. Write your answers on the spaces provided. . In the Interesting box, write down some facts about the specific financial statement. Scenario: Shark Loans received a request for a construction loan from Wendy Services Inc. This construction loan will be used for the building their fifth branch in Pasay. The company submitted their statement of financial position and income statement. Help Shark Loans choose which financial statement they would use as a basis on whether they will accept or reject Wendy Services Inc.'s request. Refer to Page 2. Justify your decision. Response 1: Statement of Financial Position Response 2: Income Statement Plus Minus Plus Minus Interesting Interesting My Decision WENDY SERVICES INC. Balance Sheet December 31 200A 200B Assets Cash Accounts Receivable Office Supplies Prepaid Insurance Office Equipment Accumulated Depreciation P166,320.00 119,350.00 5,775.00 15,400.00 P332,640.00 59,675.00 5,775.00 15,400.00 261,800.00 53,900.00 300,000.00 61,500.00 207,900.00 P514,745.00 238,500.00 P651,990.00 Total Assets Liabilities and Owner's Equity Accounts Payable Salary Payable Unearned Revenue P53,900.00 9,240.00 23,100.00 P86,240.00 P107,800.00 9,240.00 27,800.00 P144,840.00 Total Liabilities 507,150.00 B. Sia-Ko, Capital Total Liabilities and Owner's Equity 428,505.00 P514,745.00 P651,990.00 WENDY SERVICES INC Income Statement December 31 200A 200B P600,000.00 P900,000.00 Revenue: Service Revenue Expenses: Equipment rental expense Wages expense Utilities expense Total expenses Net Income P200,000.00 P90,000.00 P60,000.00 P200,000.00 P90,000.00 P60,000.00 P350,000.00 P250,000.00 P350,000.00 P550,000.00 SAMPLE PROBLEMS ON FINANCIAL RATIOS 1. The management of International Heal Medical Company is evaluating the performance of its three (3) divisions. The Booboo Division had operating profit of P24,950 and on average used assets with a book value of P311,900. The Splint Division had an operating profit of P17,500 and used average assets of $177,950. The Intensive Care Division had an operating profit of P28,500 and average assets of $475,000. The company is planning to award the Intensive Care Division relying on its high operating profit. Should the management continue with this decision? Justify your answer. 2. Charlie's Construction Company is a growing construction business that has a few contracts to build storefronts in Pasay. Charlie's balance sheet shows beginning assets of P1,000,000 and an ending balance of P2,000,000 of assets. During the current year, Charlie's company had a net income of P20,000,000. Compute for the company's return on assets and interpret the results. 3. Dave's Guitar Shop is thinking about building an addition onto the back of its existing building for more storage. Dave consults with his banker about applying for a new loan. The bank asks for Dave's balance to examine his overall debt levels. The banker discovers that Dave has total assets of P5,000,000 and total liabilities of P25,000. Compute for Dave's debt ratio