The balance sheet and income statement for the J. P. Robard Mfg. Company are given here:

J. P. Robard Mfg. Company Balance Sheet ($000)

Cash	$500
Accounts receivable	2,000
Inventories	1,000
Current assets	$3,500
Net fixed assets	4,500
Total assets	$8,000
Accounts payable	$1,100
Accrued expenses	600
Short-term notes payable	300
Current liabilities	$2,000
Long-term debt	2,000
Owners' equity	4,000
Total liabilities and owners' equity	$8,000

J. P. Robard Mfg. Company Income Statement ($000)

Net sales (all credit)	$8,000
Cost of goods sold	3,300
Gross profit	$4,700
Operating expenses (includes $500 depreciation)	3,000
Operating income	$1,700
Interest expense	367
Earnings before taxes	$1,333
Income taxes (40 %40% )	533
Net income	$800

INDUSTRY NORMS Current ratio 1.5: 1 Inventory turnover 3 x Total asset turnover 1 x Operating profit margin 18% Operating income return on investment 18% Debt ratio 60% Average collection period 100 days Fixed asset turnover 1.5 :1 Return on equity 15%

A) The company is applying for Bank Loan. Write a report to Gulf Bank PLC whether you recommend the bank for sanction of Loan. (250 words)

B) Would you recommend investment in this company? Similar companies pay 12% return. Calculate any other ratio you think appropriate. Write a report. (250 words)