Question 1 (20 points) You are bank loan manager for Rocky Shore Bank. One of your largest clients, Paulina Lee, the president of PL Corporation interested in a 5-year loan to expand the company's operations. The borrowed funds would be used to purchase new equipment as part of an expansion project underway. As evidence of the company's ability to pay back any debt, Patricia provided you with the following financial statement analysis results and also indicated she would follow up with providing the industry averages within the next few days. You asked her for additional information before making your decision. She acted offended and said "What more could you possibly want to know?" You responded that at a minimum, you would need complete audited financial statements. Required. (20 marks) 1. Briefly explain why you would want the financial statements to be audited. How does having audited financial statements help the bank in its decision to lend money? (4 marks) 2. Discuss the implications of the ratios provided for the lending decision you are to make. Do the results paint a favourable picture for the bank? Explain. (7 marks) 3. How are these ratios relevant to the lending decision? (3 marks) e