You are the loan officer at Corner Street Community Bank. You received a loan application from T.P. Jarmon Company. The first picture is for financial statements that belong to the most recent fiscal year(s). The second picture provides financial ratios for the industry. Analyze these financial statements in terms of liquidity, profitability and solvency. Give an opinion on whether you would approve the loan application or not in great detail.

2013 T. P. Jarmon Company, Balance Sheet for 12/31/2012 and 12/31/2013 2012 Cash $ 15,000 Marketable securities 6,000 Accounts receivable 42,000 Inventory 51,000 Prepaid rent 1,200 Total current assets $115,200 Net plant and equipment 286,000 Total assets $401,200 Accounts payable $ 48,000 Notes payable 15,000 Accruals 6,000 Total current liabilities $ 69,000 Long-term debt 160,000 Common stockholders' equity 172,200 Total liabilities and equity $401,200 $ 14,000 6,200 33,000 84,000 1,100 $ 138,300 270,000 $408,300 $ 57,000 13,000 5,000 $ 75,000 150,000 183,300 $408,300 T. P. Jarmon Company, Income Statement for the Year Ended 12/31/2013 Sales (all credit) $600,000 Less cost of goods sold 460,000 Gross profit $140,000 Less operating and interest expenses General and administrative $30,000 Interest 10,000 Depreciation 30,000 Total 70,000 Earnings before taxes $ 70,000 Less taxes 27,100 Net income available to common stockholders $ 42,900 Less cash dividends 31,800 Change in retained earnings $ 11,100 RATIO NORM 1.8 0.9 0.5 10.0 20.0 Current ratio Acid-test ratio Debt ratio Times interest earned Average collection period Inventory turnover (based on cost of goods sold) Return on common equity Operating return on assets Operating profit margin Total asset turnover Fixed asset turnover 7.0 12.0% 16.8% 14.0% 1.20 1.80