Problem 14-18 Common-Size Statements and Financial Ratios for a Loan Application [L014-1, LO14-2 LO14-3, LO14-4 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 profftable, it is now experiencing a severe cash shortage. For this reason, it bs $650,000 long-term loan from Gulfport State Bank, $175,000 of which will be used to bolster the Cash account and $475,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow Comparative Balance Sheet Assets Current asset Cash Marketable securities Accounta receivable, net Inventory Prepaid expenses 130,000 300,000 12,000 50,000 745,000 7,000 544,000 099 4001520-000 3,064,000 672,000 1,095,000 34,000 Total current asseta Plant and equipment, net Total assets Liabilities and Stockholders Equity Liabilitien 1.931,00 4,030,400 Current 1iabiiitle Bonds payable, 12 450,00 750,0 750,000 1,200,000 Total 1iabi1itien Stockholders' eqaitys 625 000 -on #tock, SIS par Retained earnings 840,000 1.565 400 40,000 1,024,000 1964 000 Total stockholders equity Total liabilities and stockholders' equity 4,030,400 3,064,000 Sabin Electronic Problem 14-18 Common-Size Statements and Financial Ratios for a Loan Application [L014-1, LO14-2 LO14-3, LO14-4 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 profftable, it is now experiencing a severe cash shortage. For this reason, it bs $650,000 long-term loan from Gulfport State Bank, $175,000 of which will be used to bolster the Cash account and $475,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow Comparative Balance Sheet Assets Current asset Cash Marketable securities Accounta receivable, net Inventory Prepaid expenses 130,000 300,000 12,000 50,000 745,000 7,000 544,000 099 4001520-000 3,064,000 672,000 1,095,000 34,000 Total current asseta Plant and equipment, net Total assets Liabilities and Stockholders Equity Liabilitien 1.931,00 4,030,400 Current 1iabiiitle Bonds payable, 12 450,00 750,0 750,000 1,200,000 Total 1iabi1itien Stockholders' eqaitys 625 000 -on #tock, SIS par Retained earnings 840,000 1.565 400 40,000 1,024,000 1964 000 Total stockholders equity Total liabilities and stockholders' equity 4,030,400 3,064,000 Sabin Electronic