You have been asked to do a loan request analysis for the loan request summary (you can use the format in Chapter 9, Loan Request Procedure & Sample Loan Request for the Big Denver Real Estate & Storage Company on pages 221 to 225) including I. Background; II. Loan Request; III. Repayment Analysis (provided on the spreadsheet to review & discuss); IV. Secondary Source of Payment; V. Overall Analysis for Financial Statements; VI; Risk Analysis and Recommendation; and Proposed Loan Structure (note on the spreadsheet, the proposed structure is a 10 year amortized loan with a 5% annual rate). See the sample loan request example for the Big Denver Real Estate & Storage Company on page 222 to 225 as an example. In your analysis: (1) For the background discuss the nature of the company and the nature of the business and experience of the companies officers. (2) For the loan request, note the amount requested for the loan and the purpose of the loan. (3) For the repayment analysis, review the repayment analysis shown on the excel spreadsheet and analyze the trends in revenue, operating expense, net income, net operating income, net cash flow after debt service, and debt coverage ratio over 2015 to 2017 and for the forecast for 2018. (4) For the secondary source of payment, report the collateral that could be used as a secondary source of payment for the loan. (5) For the Overview Financial Analysis for Provided Statements, be sure to include the following: (1) A review of the trends in the balance sheets 2015 to 2017 (including trends in equity, debt and cash, financial leverage and the current and quick ratios; and the growth rate in assets and the days operating cycle and days cash to cash cycle; and cash flow to current maturity debt). 6 (2) A review of the trends in the income statements 2015 to 2017 (including trends in sales, cost of goods sold, operating expenses, and operating profits, and the growth rate in sales). (3) A review of the forecast balance sheet for 2018, and comments on the realism of the assumptions used for the forecast. (4) A review of the forecast income statement for 2018, and comments on the realism of the assumptions used for the forecast. (5) A financial ratio analysis for the trends in the financial ratios provided from 2017 to 2018 including a Dupont Analysis for the trends in ROE (function of the ROA and EM) and for ROA (function of the NPM and AU), and a closer analysis of the NPM (function of the GPM and OPM), and AU (function of the days inventory, days accounts receivables, and fixed asset turnover). (6) An analysis of the trends for the summary indirect cash flow statement, including trends for cash from operations, cash used in investing activities, and cash from financing activities trends. From your analysis above, comment on what you find in terms of trends in liquidity and bankruptcy risk, and your Dupont profitability analysis. (6) For the Risk Analysis and Recommendation, give your opinion on whether the loan should be granted, and how it could be structured to reduce any risk of non- repayment for the bank. Is the suggested structure of a 10 year amortized loan, with a 5% annual rate appropriate? Explain why or why not? What restrictive covenants should be placed on the loan to reduce the banks risk of non-repayment (i.e. any restrictions placed on current and quick ratios, borrowing additional debt, insurance on key executives or any other restrictions) and any suggestions for the firm that would help reduce the banks risk for the loan