T.P. Jarmon Company, Balance Sheet for 12/31/2014 and 12/31/2015
ASSETS	2014		2015
Cash	$15,000		$14,000
Marketable securities	6,000		6,230
Accounts receivable	42,000		32,990
Inventory	51,000		83,800
Prepaid rent	1,200		1,050
Total current assets	$115,200		$138,070
Net plant and equipment	286,000		270,100
Total assets	$401,200		$408,170
LIABILITIES AND OWNERS' EQUITY
Accounts payable	$48,000		$57,060
Notes payable	15,000		13,040
Accruals	6,000		5,000
Total current liabilities	$69,000		$75,100
Long-term debt	160,000		149,770
Common stockholders' equity	172,200		183,300
Total liabilities and equity	$401,200		$408,170

T.P. Jarmon Company, Income Statement for the Year Ended 12/31/2015
Sales (all credit)			$596,000
Less cost of goods sold			457,000
Gross profit			$139,000
Less operating and interest expenses
General and administrative	$30,700
Interest	10,700
Depreciation	29,900
Total			$71,300
Earnings before taxes			$67,700
Less taxes			27,400
Net income available to common stockholders			$40,300
Less cash dividends			31,000
Change in retained earnings			$9,300

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RATIO	???NORM
Current ratio	1.801.80
?Acid-test ratio	0.820.82
Debt ratio	0.500.50
Times interest earned	9.009.00
Average collection period	20.0020.00
Inventory turnover? (based on cost of goods? sold)	6.976.97
Return on common equity	10.610.6	?%
Operating return on assets	16.416.4	?%
Operating profit margin	13.913.9	?%
Total asset turnover	1.201.20
Fixed asset turnover	1.701.70

(Financial analysis) The T. P. Jarmon Company manufactures and sells a line of exclusive sportswear. The firm's sales were $596,000 for the year just ended, and its total assets was $408,170. The company was started by Mr. Jarmon just 10 years ago and has been profitable every year since its inception. The chief financial officer for the firm, Brent Vehlim, has decided to seek a line of credit totaling $80,000 from the firm's bank. In the past, the company has relied on its suppliers to finance a large part of its needs for inventory. However, in recent months tight money conditions have led the firm's suppliers to offer sizable cash discounts to speed up payments for purchases. Mr. Vehlim wants to use the line of credit to replace a large portion of the firm's payables during the summer, which is the firm's peak seasonal sales period The firm's two most recent balance sheets were presented to the bank in support of its loan request. In addition, the firm's income statement for the year just ended was provided. These statements are found in the popup window: was assigned the task of analyzing Jarmon's loan request. Mike Ameen, associate credit analyst for the Merchants National Bank of Midland, Michigan, a. Calculate the financial ratios for 2015 corresponding to the industry norms provided in the popup window: EB b. Which of the ratios reported in the industry norms do you feel should be most crucial in determining whether the bank should extend the line of credit