Question 16 (18 points) Retake question For the purpose of borrowing $100,000 (10-year loan with 12% interest annually), Shannon Merchandising Company has submitted the following audited Balance Sheet and Income Statement to Bank. Assume you are the bank loan officer of the bank and have to decide whether to approve or reject Shannon's loan application. As first step, you would like to determine whether Shannon Company currently is overleveraged or not. If a company's debt level is too high (overleveraged) it affects its ability to pay the interest, principal repayments, and finds it challenging to afford its day-to-day running costs due to its debt weight. State the name of a popular ratio that is used for this purpose and compute the amount of the ratio for Shannon Company for 2022 . Example of Answer: 20% No decimal points, space, or comma. Name of the ratio (spell out comnleto name) = A The amount of ratio = strong earning power to afford the interest payments. State the name of a popular ratio that is used for this purpose and compute the amount of the ratio for Shannon Company for 2022. Example of Answer: 20.14% Two decimal points. No space or comma. Name of the ratio (spell out complete name) = A The amount of ratio = As third step, you would like to determine whether Shannon Company has the necessary liquidity to pay its operating day-today bills on a timely basis without any difficulty. State the name of a popular ratio that is used for this purpose and compute the amount of the ratio for Shannon Company for 2022. Example of Answer: 1.40 Two decimal points. No space, dollar sign, or comma. Name of the ratio (spell out comnlete name) = Th amount of ratio = A Your Recommendation: Would you approve the loan application of Shannon Your answer =