You have just been hired as a loan officer at Westmount Bank. Your supervisor has given you a file containing a request from Hill Company, a manufacturer of computer components, for a $2,000,000 five-year loan. Financial statement data on the company for the past two years are given below: HILL COMPANY Comparative Balance Sheet This Year Last Year $ 270,000 $ 345,000 0 75,000 755,000 1,005,000 530,000 630,000 Assets Current assets: Cash Temporary investments Accounts receivable, net Inventory Prepaid expenses Total current assets Plant and equipment, net Total assets Liabilities and Shareholders' Equity Liabilities: Current liabilities 100,000 85,000 2,130,000 1,665,000 2,465,000 2,375,000 $4,595,000 $4,040,000 935,000 $ 730,000 Bonds payable, 10% 800,000 650,000 Total liabilities 1,735,000 1,380,000 Shareholders' equity: Preferred shares, 20,000, $2.40 no par value 450,000 450,000 Common shares, 50,000 1,500,000 1,500,000 Retained earnings 910,000 710,000 Total shareholders equity Total liabilities and shareholders' equity 2,860,000 2,660,000 $4,595,000 $4,040,000 Preferred shares Sales (all on account) Cost of goods sold Gross margin HILL COMPANY Comparative Income Statement and Reconciliation of Retained Earnings Selling and administrative expenses Operating income Interest expense Net income before taxes Income taxes (384) Net income Dividends paid: This Year Last Year $4,300,000 $3,360,000 3,250,000 2,580,000 1,050,000 780,000 570,000 430,000 480,000 350,000 80,000 65,000 400,000 285,000 120,000 85,500 280,000 199,500 36,000 36,000 Common shares 44,000 22,000 Total dividends paid 80,000 58,000 Net income retained 200,000 141,500 Retained earnings, beginning of year 710,000 568,500 Total dividends paid Net income retained Retained earnings, beginning of year Retained earnings, end of year 44,000 22,000 80,000 58,000 200,000 141,500 710,000 568,500 $ 910,000 $ 710,000 Pat Smith, who just three years ago was appointed president of Hill Company, admits that the company has been inconsistent in its performance over the past several years. But Smith argues that the company has its costs under control and is now experiencing strong sales growth, as evidenced by the more than 25% increase in sales over the past year. Smith also argues that Investors hav recognized the improving situation at Hill Company, as shown by the jump in the price of its common shares from $13 per share la year to $25 per share this year. Smith belleves that with strong leadership and with the modernized equipment that the $2,000,00 loan will permit the company to buy, profits will be even stronger in the future. Anxious to impress your supervisor, you decide to generate all the information you can about the company. You determine that th following ratios are typical of companies in Hill Company's industry. Current ratio Acid-test ratio Average collection period Average sale period Return on assets Debt-to-equity ratio Times interest earned ratio Price-earnings ratio Required: 2.31 1.18 33 days 62 days 10.5% 0.48 7.4 8 1. You decide to assess the rate of return that the company is generating first. a.Compute the return on total assets for both this year and last year. (Total assets at the beginning of last year were $3,560,0 Round your answers to 1 decimal place.) Return on total assets This Year 0.0 % Last Year Calculate the following ASAP! For this year and last year for ALL BELOW 1. Return on total assets (both (years) 2. Return on common shareholders equity 3. Leverage 4. Earnings per share 5. Dividend yield ratio for common shares 6. Dividend payout ratio for common shares 7. Price earnings ratio1decimal place 8. Book value per common share(2decimal place) 9. Gross margins percentage (1decimal place) 10. Working capital 11. Current ratio 12. Acid-test ratio 13. Average collection period 14. average sales period 15. debt to equity ratio (2decimal) 16. Times interest earned (1 decimal)