You have just been hired as a loan officer at Evergreen Park State Bank. Your supervisor has given you a file containing a request from Automart Company, a manufacturer of auto components, for a $1,000,000 five-year loan. Financial statement data on the company for the last two years are given below:

Automart Company Comparative Balance Sheet
	This Year		Last Year
Assets
Current assets:
Cash	$	335,000	$	423,000
Marketable securities		0		96,000
Accounts receivable, net		902,000		606,000
Inventory		1,400,000		810,000
Prepaid expenses		88,000		59,000
Total current assets		2,725,000		1,994,000
Plant and equipment, net		3,154,600		3,109,700
Total assets	$	5,879,600	$	5,103,700
Liabilities and Stockholders' Equity
Liabilities:
Current liabilities	$	1,340,000	$	790,000
Bonds payable, 10%		1,130,000		1,190,000
Total liabilities		2,470,000		1,980,000
Stockholders' equity:
Preferred stock, 8%, $30 par value		600,000		600,000
Common stock, $40 par value		2,000,000		2,000,000
Retained earnings		809,600		523,700
Total stockholders' equity		3,409,600		3,123,700
Total liabilities and stockholders' equity	$	5,879,600	$	5,103,700

Automart Company Comparative Income Statement and Reconciliation
	This Year		Last Year
Sales	$	5,370,000	$	4,250,000
Cost of goods sold		4,140,000		3,260,000
Gross margin		1,230,000		990,000
Selling and administrative expenses		520,000		510,000
Net operating income		710,000		480,000
Interest expense		113,000		119,000
Net income before taxes		597,000		361,000
Income taxes (30%)		179,100		108,300
Net income		417,900		252,700
Dividends paid:
Preferred stock		48,000		48,000
Common stock		84,000		42,000
Total dividends paid		132,000		90,000
Net income retained		285,900		162,700
Retained earnings, beginning of year		523,700		361,000
Retained earnings, end of year	$	809,600	$	523,700

Cary Grant, who just two years ago was appointed president of Automart Company, admits that the company has been inconsistent in its performance over the past several years. But Grant 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 last year. Grant also argues that investors have recognized the improving situation at Automart Company, as shown by the jump in the price of its common stock from $70 per share last year to $54 per share this year. Grant believes that with strong leadership and with the modernized equipment that the $1,000,000 loan will enable 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 the following ratios are typical of companies in Automarts industry:

Current ratio	2.3
Acid-test ratio	1.2
Average collection period	31	days
Average sale period	60	days
Return on assets	9.5	%
Debt-to-equity ratio	0.65
Times interest earned ratio	5.7
Price-earnings ratio	10

Required:

1.

Present the balance sheet in common-size format. (Round your percentage answers to 1 decimal place i.e., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column.)

2.	Present the income statement in common-size format down through net income. (Round your percentage answers to 1 decimal place i.e., 0.123 is considered as 12.3. Due to rounding, figures may not fully reconcile down a column.)