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These two companies are in the same business and state but different cities. Each company has been in operation for about 10 years. Both companies
These two companies are in the same business and state but different cities. Each company has been in operation for about 10 years. Both companies received an unqualified audit opinion on the financial statements. Thor Company wants to borrow $105,000 and Gunnar Company is asking for $36,000. The loans will be for a two-year period. Neither company issued stock in the current year. Assume the end-of-year total assets and net equipment balances approximate the year's average and all sales are on account. Required: 1. Calculate the ratios in Exhibit 135 for which sufticient information is available. Round all calculations to two decimal places. 2. Assume that you work in the loan department of a local bank. You have been asked to analyze the situation and recommend which loan is preferable. Based on the data given, your analysis prepared in requirement 1 , and any other information, give your choice and the supporting explanation
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