Question 4 (20 marks) You have recently graduated from Yorkville Universitys BBA program, and have been hired by a major Canadian Bank with a starting salary of $110,000 per year Your boss hired you directly from school as she knew you had performed very well in Professor Moscardellis Managerial Finance course You worked hard by reading all the textbook and you never behaved unethically by cheating or plagiarizing during any of the exams One of the Banks clients (Earl Grey Golf Corp ) has provided you with their latest Financial Statements Earl Grey Golf Corporation 2019 and 2020 Statement of Financial Position ASSETS LIABILITIES 2019 2020 2019 2020 CURRENT ASSETS CURRENT LIABILITIES Cash 24,046 18,255 Accounts Payable 23,184 18,420 Accounts Receivable 12,448 22,235 Notes Payable 12,000 40,800 Inventory 25,392 49,155 Other 11,571 27,553 TOTAL Current Assets 61,886 89,645 Total Current Liabilities 46,755 86,773 Long Term Debt 80,000 205,000 FIXED ASSETS Net Plant Equipment 324,695 485,734 OWNERS EQUITY Common Stock 40,000 40,000 Retained Earnings 219,826 243,606 TOTAL OWNERS EQUITY 259,826 283,606 TOTAL ASSETS 386,581 575,379 TOTAL Liabilities OE 386,581 575,379 Statement of Comprehensive Income 2020 Calculate These RATIOS (2020) Sales $326,919 Current Ratio Return on Equity Cost of Goods Sold 203,199 Quick Ratio Cash Coverage Depreciation 32,420 Cash Ratio Fixed Asset Turnover Earnings Before Interest Tax $91,300 Asset Turnover Dupont Identity Interest Paid 17,500 Inventory Turnover Return on Assets Taxable Income $73,800 Receivable Turnover Taxes (35 ) 29,520 Total Debt Ratio Net Income $44,280 Equity Multiplier Dividends $20,500 Times Interest Earned Additions to Retained Earnings $23,780 Profit Margin Your boss wants you to do to the following Calculate the Ratios ABOVE for 2020 (show all your work) The client has asked for a $10 million loan Based on the ratios above which ones do you believe are most important to a bank and why Make a recommendation (short paragraph) should the bank lend the client the money Why or Why not

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Question 4 (20 marks) You have recently graduated from Yorkville Universitys BBA program, and have been hired by a major Canadian Bank with a starting

Question 4 (20 marks)

You have recently graduated from Yorkville Universitys BBA program, and have been hired by a major Canadian Bank with a starting salary of $110,000 per year. Your boss hired you directly from school as she knew you had performed very well in Professor Moscardellis Managerial Finance course. You worked hard by reading all the textbook and you never behaved unethically by cheating or plagiarizing during any of the exams.

One of the Banks clients (Earl Grey Golf Corp.) has provided you with their latest Financial Statements.

Earl Grey Golf Corporation

2019 and 2020 Statement of Financial Position

ASSETS

LIABILITIES

	2019	2020		2019	2020
CURRENT ASSETS			CURRENT LIABILITIES
Cash	24,046	18,255	Accounts Payable	23,184	18,420
Accounts Receivable	12,448	22,235	Notes Payable	12,000	40,800
Inventory	25,392	49,155	Other	11,571	27,553
TOTAL Current Assets	61,886	89,645	Total Current Liabilities	46,755	86,773
			Long Term Debt	80,000	205,000
FIXED ASSETS
Net Plant & Equipment	324,695	485,734	OWNERS EQUITY
			Common Stock	40,000	40,000
			Retained Earnings	219,826	243,606
			TOTAL OWNERS EQUITY	259,826	283,606
TOTAL ASSETS	386,581	575,379	TOTAL Liabilities & OE	386,581	575,379

Statement of Comprehensive Income

	2020	Calculate These RATIOS (2020)
Sales	$326,919	Current Ratio	Return on Equity
Cost of Goods Sold	203,199	Quick Ratio	Cash Coverage
Depreciation	32,420	Cash Ratio	Fixed Asset Turnover
Earnings Before Interest & Tax	$91,300	Asset Turnover	Dupont Identity
Interest Paid	17,500	Inventory Turnover	Return on Assets
Taxable Income	$73,800	Receivable Turnover
Taxes (35%)	29,520	Total Debt Ratio
Net Income	$44,280	Equity Multiplier
Dividends	$20,500	Times Interest Earned
Additions to Retained Earnings	$23,780	Profit Margin

Your boss wants you to do to the following;

Calculate the Ratios ABOVE for 2020 (show all your work);

The client has asked for a $10 million loan. Based on the ratios above which ones do you believe are most important to a bank and why? Make a recommendation (short paragraph) should the bank lend the client the money? Why or Why not.