The firm’s most recent financial statements were provided to its bank as support for the firm’s loan request. Joanne Peebie, a loan analyst trainee for the Morristown Bank and Trust, has been assigned the task of analyzing the firm’s loan request. RPI, Inc. Balance Sheets for 12/31/02 and 12/31/03 Assets 20022003 Cash$16,000$17,000 Marketable securities7,0007,200 Accounts receivable42,00038,000 Inventory50,00093,000 Prepaid rent1,2001,100 Total current assets$116,200$156,300 Net plant and equipment286,000290,000 Total assets$402,200$446,300 Liabilities and Stockholders’ Equity 20022003 Accounts payable$48,000$55,000 Notes payable16,00013,000 Accruals6,0005,000 Total current liabilities$70,000$73,000 Long-term debt$160,000$150,000 Common stockholders’ equity$172,200$223,300 Total liabilities and equity$402,200$446,300 RPI, Inc. Income Statement For the Year Ended 12/31/03 Sales (all credit)$700,000 Less: Cost of goods sold500,000 Gross profits$200,000 Less: Operating and interest expenses General and administrative$50,000 Interest10,000 Depreciation30,000 Total90,000 Profit before taxes$110,000 Less: Taxes27,100 Net income availableto common stockholders $82,900 Less: Cash dividends31,800 Change in retained earnings$51,100 A.Calculate the financial ratios for 2003 corresponding to the industry norms provided below: 1.Current Ratio 2.Acid Ratio 3.Debt Ratio 4.Time interest earned 5.Average collection period 6.Inventory Turn Over B.Analyze the financial position of RPI against the Industry Norm by looking at the financial ratio’s that are calculated. The analysis should establish a comparison between the companies’ financial position and should explain the reason for the differences if any and the recommendation