You are a bank loan manager and you have had two company's (Arrow and Root) come to your bank requesting a 6-month loan. This assignment is to be performed in groups of 2 people. Only one completed assignment is required for each group. This assignment builds on Chapter 14 and should be submitted after completing this chapter. Your instructor will provide you with a Microsoft Excel file that contains the financial statements for 2 companies (Arrow-S and Root-S) and a tab where you will calculate all ratios (Ratio template for students). You will also be provided a Microsoft Word document for you to type up a conclusion. There are two parts to this assignment: 1) In the Microsoft Excel file on the "Ratio template for students" tab you will be calculating Liquidity, Solvency, and Profitability ratios for each company, stating what makes a ratio more successful and comparing the results between the two companies to determine which company has stronger results. (32 marks) The calculations for Arrow and Root will be completed in columns D and F. Please ensure that you indicate the units for each ratio calculation. For example, if the unit is days, times, :1, record that in columns E and G beside your calculation. Complete all calculations to 2 decimal places. The calculation portion of the assignment must be completed in Microsoft Excel (preferably using linking of cells) and then submitted either electronically or printed based on your instructor preference. In column H comment on whether the ratio should be higher or lower to be more successful. Please note when comparing the working capital ratios between companies, the companies need to be considered comparable in size. For the purposes of this assignment, assume Arrow and Root are comparable. In column J comment on which company has a better ratio result based on your calculations. (It may be the same depending on your particular version.) 2) In Microsoft Word, you will write a conclusion relating to which company you would approve the loan for based on your calculations on the "Ratio Template for Students" tab (in Microsoft Excel in Part 1 above). The final write-up should be in paragraph form and Liquidity, Solvency, and Profitability should all be addressed separately in the correct section of the document. You will also P ASSETS ARROW LED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER CANADIAN DOLLARS STATEMENT OF FINANCIAL POSITION AS AT DECEMBE CANADIAN DOLLARS 45 201 34 Ja 121 2 142 +45 147 125 2 a 34 #T 2201 2 " AM 40% 1% 1399 2014 309 Liquidity Working Capital Current Assets-Current Liabilities Current Ratio: Quick Ratio Current Assets Current Liabilities Cash Short-term Instments + Accts Receivable Current Liabilities Receivable Turnover Credit Sales Accounts Receivable Average Collection Period: 365 Receivable Turnover Inventory Turnover: Cost of Goods Sold leventory Days inventory Solvency 365 Inventory Turnover Debt to Total Assets Total Liabilities Total Assets Times Interest Earned Profit Interest Expense Income Tax Expense Interest Expete Debe to Total Equity Profitability Total Liabilities Total Equity Profit Margie Sales Return On Assets (ROAK Profi Total Assets Asset Tumever Sales Total Assets Earnings Per Share Profit-Preferred Dividends Weighted Average Number of Shares Price Earnings Market Price per shard EPS Retum on Common Shareholder's Equity Profit-Preferred Dividends Common Shareholder's Equity Arrow Is higher or lower Which company is better? better? INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 3, 20 CANADIAN DOLLARS Rev T 1,142 27 BER 342 345 Roach and dep Sales and d 196 - 97 THE 25 Popoty opene P ROOT LTD STATEMENT OF FINANCIAL POSITION AS AT DECEMBER CANADIAN DOLLARS ASSETS Pety plan and Offi P T TL Studenty P " " " M 2 4 37 " 447 Ta 2114 15 1341 21 T 2 34 20 212 m 342 HE A 2199 213 6150 2364 33% 1005 4365