As loan analyst for Novak Bank, you have been presented the following information. Assets Sunland Co. Carla Vista Co. Cash $225,000 $154,000 Receivables 105,000 235,000 Inventories 479,200 358,000 Total current assets 809,200 747,000 Other assets 228,000 415,000 Total assets $1,037,200 $1,162,000 Liabilities and Equity Current liabilities $238,000 $415,000 Long-term liabilities 191,000 289,000 Capital stock and retained earnings 608,200 458,000 Total liabilities and equity $1,037,200 $1,162,000 Annual sales $1,270,000 $2,280,000 Rate of gross profit on sales 35% 25% Each of these companies has requested a loan of $203,000 for 6 months with no collateral offered. Inasmuch as your bank has reached its quota for loans of this type, only one of these requests is to be granted. Compute the various ratios for each company. (Round answer to 2 decimal places, e.g. 2.25.) Current ratio Acid-test ratio Accounts receivable turnover Inventory turnover Sunland Co. :1 :1 times times Carla Vista Co. :1 : 1 times times Cash to current liabilities : 1 : 1
As loan analyst for Novak Bank, you have been presented the following information. Assets Sunland Co. Carla Vista Co. Cash $225,000 $154,000 Receivables 105,000 235,000 Inventories 479,200 358,000 Total current assets 809,200 747,000 Other assets 228,000 415,000 Total assets $1,037,200 $1,162,000 Liabilities and Equity Current liabilities $238,000 $415,000 Long-term liabilities 191,000 289,000 Capital stock and retained earnings 608,200 458,000 Total liabilities and equity $1,037,200 $1,162,000 Annual sales $1,270,000 $2,280,000 Rate of gross profit on sales 35% 25% Each of these companies has requested a loan of $203,000 for 6 months with no collateral offered. Inasmuch as your bank has reached its quota for loans of this type, only one of these requests is to be granted. Compute the various ratios for each company. (Round answer to 2 decimal places, e.g. 2.25.) Current ratio Acid-test ratio Accounts receivable turnover Inventory turnover Sunland Co. :1 :1 times times Carla Vista Co. :1 : 1 times times Cash to current liabilities : 1 : 1
Chapter7: Types And Costs Of Financial Capital
Section: Chapter Questions
Problem 1bM
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Transcribed Image Text:As loan analyst for Novak Bank, you have been presented the following information.
Assets
Sunland Co.
Carla Vista Co.
Cash
$225,000
$154,000
Receivables
105,000
235,000
Inventories
479,200
358,000
Total current assets
809,200
747,000
Other assets
228,000
415,000
Total assets
$1,037,200
$1,162,000
Liabilities and Equity
Current liabilities
$238,000
$415,000
Long-term liabilities
191,000
289,000
Capital stock and retained earnings
608,200
458,000
Total liabilities and equity
$1,037,200
$1,162,000
Annual sales
$1,270,000
$2,280,000
Rate of gross profit on sales
35%
25%
Each of these companies has requested a loan of $203,000 for 6 months with no collateral offered. Inasmuch as
your bank has reached its quota for loans of this type, only one of these requests is to be granted.
Compute the various ratios for each company. (Round answer to 2 decimal places, e.g. 2.25.)
Current ratio
Acid-test ratio
Accounts receivable turnover
Inventory turnover
Sunland Co.
:1
:1
times
times
Carla Vista Co.
:1
: 1
times
times
Cash to current liabilities
: 1
: 1
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