1. Prepare and analyze the cash flow statement of the company.
2. Prepare and analyze the common size statement of the company.
3. compute and analyze the trend analysis of the company.
4. What are the various ratios computed to analyze the financial statements?
5. Compute the above ratios based one case Exhibit 3.
6. Based on these ratios and their comparisons with industry ratios, would you, as the loan officer, grant the loan request?
7. What areas of improvement can you suggest for the future?

EXHIBIT 1: INCOME STATEMENT, APRIL 1 TO MARCH 31 (IN THOUSANDS) Source: Company's audited financial statement. EXHIBIT 2: BALANCE SHEET (IN THOUSANDS) Source: Company's audited financial statement. EXHIBIT 3: INDUSTRY AVERAGE OF KEY RATIOS \begin{tabular}{|l|l|} \hline Ratio & Sector Average \\ \hline Current ratio & 2.30:1 \\ \hline Acid test ratio (quick ratio) & 1.20:1 \\ \hline Receivable turnover ratio & 7 times \\ \hline Receivable days & 52 days \\ \hline Inventory turnover ratio & 4.85 times \\ \hline Inventory days & 75 days \\ \hline Long-term debt to total debt & 24% \\ \hline Debt-to-equity ratio & 35% \\ \hline Gross profit ratio & 40% \\ \hline Net profit ratio & 18% \\ \hline Return on equity & 22% \\ \hline Return on total assets & 10% \\ \hline Total asset turnover ratio & 1.1 \\ \hline Fixed asset turnover ratio & 2 \\ \hline Current asset turnover ratio & 3 \\ \hline Interestcoverageratio(timesinterestearned) & 10 \\ \hline Working capital turnover ratio & 8 \\ \hline Return on fixed assets & 24% \\ \hline \end{tabular}