Quickfix Autoparts Consolidated Balance Sheet 2019 2020 $ ASSETS Current Assets Cash & marketable security Accounts receivable Inventory Total current assets Property and equipment (net) TOTAL ASSETS (A) 309,099 12,000 270,000 591,099 200,000 791,099 LIABILITIES Current liabilities Accounts payable Accrued liabilities Short-term bank loan Total Current Liabilities (CL) Long term debt Total Liabilities Stockholders' equity Common stock (100,000 shares authorized and outstanding) Retained earnings 10,506 5,100 145,000 160,606 271,000 431,606 320,000 39,493 Total liabilities and shareholders' equity 791,099 1. Roberto, owner of Quickfix Autoparts (QA), forecast that 2020 sales will increase to $786,000. The gross profit margin was estimated at 16%. The total operating expenses had been estimated in $72,606. The interest expense was estimated equal to 6% of the estimated sales. Additionally, assume (1) that the company's total assets are being used at nearly full capacity, so the assets will have to increase as sales grow, (2) the accounts payable and accruals will also grow in proportion to sales. Determine the amount of additional financing needed (AFN) and pro forma financial statements (balance sheet and Income Statement). (25 pts). 2. Complete the table with financial ratios (10 pts). Comment on Quickfix's general financial condition. What arguments would have to be made to convince the bank that they should grant Quickfix the loan? (The comments and arguments must be complete and specific). (10 pts) (Total 20 pts) 2019 Selected ratios Net profit margin 2020 Debt ratio Debt to equity Time interest earned Current ratio concentrating in Finance. When Alberto started his internship, Roberto explained exactly what his concerns were. "I'm going to have the raise funds for future growth, and given my recent financial situation, the prospects look pretty bleak. The bank's commercial loan committee is going to want some pretty convincing arguments as to why they should grant me the loan. I need to put some concrete remedial measures in place, and was hoping that you can help sort things out, Alberto", said Roberto. Quickfix Autoparts Income Statement 2020 2019 $ 655,000.00 Net sales Cost of goods sold $ 537,100.00 Gross Profit $ 117,900.00 Administrative and Selling Expenses $ 15,345.00 Depreciation $ 25,000.00 Miscellaneous expenses $ 3,557.00 Total operating expenses $ 43,902.00 EBIT $ 73,998.00 Interest Expense $ 35,900.00 Before tax earnings $ 38,098.00 Tax (40%) $ 15,239.20 Net Income $ 22,858.80 3. Assume that Quickfix's bank has been pressuring the firm to improve its liquidity. Which of the following actions proposed by Alberto Alvarez (Quickfix's external adviser) do you believe will actually achieve this objective? Why or Why not? (12 pts; 3 pts each one). (You must assess every option (a -d) and the answer offered must include: Yes or No and why). a. Sell new equity and use the proceeds to purchase an equipment. b. Use cash and marketable securities to pay off short-term bank borrowing and accounts payable. C. Borrow long-term and use the proceeds to pay off short-term debt. d. Sell surplus fixed assets and invest the proceeds in marketable securities