Pair off and compare your ratios. Discuss which of the ratios look weak and which look positive.

Develop a one-page explanation of the company’s ratios that you can show to potential lenders.

The popularity of soccer as a participation sport attracted Leo Hernandez and Gil Ferguson to open an indoor soccer arena with retail shops selling soccerrelated merchandise. Last year’s financial statements for their business OnGoal are shown here. Leo and Gil are hoping to expand their business by opening another facility. However, before they approach banks or potential investors, they need to look closely at what the accounting statements show them.

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OnGoal Balance Sheet December 31, 20- ASSETS Current Assets: Cash Accounts Receivable Merchandise Inventory Prepaid Expenses Total Current Assets $ 7,120 2,400 18,200 3,040 $ 40,760 Fixed Assets: Fixtures $16,800 Less Accumulated Depreciation 3,600 Building 78,000 Less Accumulated Depreciation 7,800 Equipment 12,000 Less Accumulated Depreciation 4,000 Total Fixed Assets $91,400 $132,160 TOTAL ASSETS: LIABILITIES/EQUITY Current Liabilities: Accounts Payable Notes Payable Contracts Payable $ 6,000 4,000 8,000 Total Current Liabilities $ 18,000 Fixed Liabilities: Long-term Note Payable $75,000 Owners' Equity: Shares Held by Hernandez and Ferguson $39,160 TOTAL LIABILITIES/EQUITY: $132,160