You have been hired as a new loan officer of Union Bank and have received a loan application from the Cory Company for 2019. You compiled the following ratios from the financial statements provided by your client.

2017 2018 2019

Current ratio 2.0: 1 1.9: 1 1.8: 1

Debt to Equity ratio .40 .55 .76

A/R turnover 15 x 10 x 8 x

Times interest earned ratio 3.0 2.5 1.5

Inventory turnover 9 x 7.4 x 5.1 x

Credit terms given to the customers of the company are net thirty days. The industry average for inventory turnover is 8.3 x.

Instructions: Discuss each of ratios, including a comment on any trends the information indicates and the possible reasons for these trends. Would you grant Cory Company the loan it is requesting?