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Wiley & Co. is a producer of computer products. The company applied for a loan from the Trust Us Bank in order to invest in
Wiley & Co. is a producer of computer products. The company applied for a loan from the Trust Us Bank in order to invest in several potential opportunities. In order to evaluate the firm as a potential debtor, the bank will analyze its financial standing to make a decision. The following are the financial ratios given to Trust Us Bank: Industry Ave 2018 Financial Ratios 2016 2017 2018 1.7 Current Ratio Quick Ratio Average Collection Period Inventory Turnover Fixed Asset Turnover Total Asset Turnover Debt ratio Times Interest Earned Gross Profit margin Operating Profit Margin Net Profit Margin ROA ROE 1.71 1.65 0.92 0.89 60 days 60 days 4.2 3.9 3.2 3.33 1.4 1.35 59.20% 61% 4.2 3.7 25% 23% 12.50% 12.70% 6.10% 6% 8.54% 8.10% 20.93% 20.74% 1.53 0.84 67 days 3.69 3.57 1.31 76% 2.78 20% 13.30% 5.10% 6.70% 28.40% 0.95 65 days 4.5 3 1.37 60% 4.75 22.50% 12.50% 6.50% 8.91% 22.28% Part 1 (10 marks). Discuss the strengths and weaknesses of Wiley & Co. including an explanation for why you consider them strengths and weaknesses. Part 2 (2 marks). Should the bank make the loan? Why or why not
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