You are a loan officer for The National Bank. Trish Jones, president of Jones Corporation, has just left your office. She is interested in an 8-year loan to expand the company's operations. The borrowed funds would be used to purchase new equipment. As evidence of the company's debt-worthiness, Trish provided you with "facts".

2019 2018

Current Ratio. 2.75 2.65

Asset Turnover 3.15. 3.14

Profitability Ration 20%. 10%

Earning Per Share 4.50. 4.50

When you told Trish you would need additional information before making your decision, she said, "What more could you possibly want to know?"

• Explain how these ratios are relevant [Note: not all of them are] to the bank's decision
• Discuss the implications of the ratios provided for the lending decision you are to make.
• Evaluate trends in the performance of Jones Corporation based on what you have now.
• List three other ratios you would want to calculate for Jones Corporation, and explain in detail why you would use each.
• Based on your analysis of Jones Corporation, will you recommend approval for the requested loan? Provide specific details to support your decision.