Exercise 24-4 As loan analyst for Marin Bank, you have been presented the following information. Toulouse...
Exercise 24-4 As loan analyst for Marin Bank, you have been presented the following information. Toulouse Co. Lautrec Co. Assets Cash $125,000 $320,000 Receivables 218,000 297,000 Inventories 580,000 500,000 Total current assets 923,000 1,117,000 Other assets 494,000 614,000 Total assets $1,417,000 $1,731,000 Liabilities and Stockholders’ Equity Current liabilities $302,000 $338,000 Long-term liabilities 409,000 494,000 Capital stock and retained earnings 706,000 899,000 Total liabilities and stockholders’ equity $1,417,000 $1,731,000 Annual sales $972,000 $1,488,000 Rate of gross profit on sales 30 % 40 % Each of these companies has requested a loan of $50,000 for 6 months with no collateral offered. Because 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.) Toulouse Co. Lautrec Co. Current ratio : 1 : 1 Acid-test ratio : 1 : 1 Accounts receivable turnover times times Inventory turnover times times Cash to current liabilities : 1 : 1
Homework Answers
| Ans.1 | Current ratio = Total current assets / Current liabilities | ||||
| Toulouse co. | 923000 /302000 | 3.06 | |||
| Lautrec co. | 1117000 / 338000 | 3.30 | |||
| Ans.2 | Acid-test ratio = (Total current assets - inventories) / Current liabilities | ||||
| Toulouse co. | (923000 - 580000) /302000 | 1.14 | |||
| Lautrec co. | (1117000 - 500000) / 338000 | 1.83 | |||
| Ans.3 | Accounts receivables turnover = Net sales / Accounts receivables | ||||
| Toulouse co. | 972000 / 218000 | 4.46 | times | ||
| Lautrec co. | 1488000 / 297000 | 5.01 | times | ||
| Ans.4 | Inventory turnover = Cost of goods sold / Inventory | ||||
| Toulouse co. | 680400 / 580000 | 1.17 | times | ||
| Lautrec co. | 892800 / 500000 | 1.79 | times | ||
| *Cost of goods sold = Sales - (Sales * Gross profit rate) | |||||
| Toulouse co. | 972000 - (972000 *30%) | 680400 | |||
| Lautrec co. | 1488000 - (1488000 * 40%) | 892800 | |||
| Ans.5 | Cash ratio = Cash / Current liabilities | ||||
| Toulouse co. | 125000 /302000 | 0.41 | |||
| Lautrec co. | 320000 / 338000 | 0.95 | |||
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Exercise 24-4 As loan analyst for Marin Bank, you have been
presented the following information. Toulouse...
Exercise 24-4 As loan analyst for Utrillo Bank, you have been presented the following information. Toulouse...
Exercise 24-4 As loan analyst for Utrillo Bank, you have been presented the following information. Toulouse Co. Lautrec Co. Assets Cash $111,800 $311,100 Receivables 210,100 306,000 Inventories 575,300 513,100 Total current assets 897,200 1,130,200 Other assets 502,100 610,200 Total assets $1,399,300 $1,740,400 Liabilities and Stockholders’ Equity Current liabilities $303,300 $349,800 Long-term liabilities 394,800 502,100 Capital stock and retained earnings 701,200 888,500 Total liabilities and stockholders’ equity $1,399,300 $1,740,400 Annual sales $936,200 $1,502,900 Rate of gross profit on sales 25 %...
Exercise 24-04 As loan analyst for Bramble Bank, you have been presented the following information. Toulouse...
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As loan analyst for Oriole Bank, you have been presented the following information. Toulouse Co. Lautrec...
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Exercise 24-4 As loan analyst for Utrillo Bank, you have been presented the following information. Toulouse...
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As loan analyst for Metlock Bank, you have been presented the following information. Toulouse Co. Lautrec...
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following information.
Toulouse Co.
Lautrec Co.
Assets
Cash
$119,000
$306,000
Receivables
217,000
289,000
Inventories
576,000
495,000
Total current assets
912,000
1,090,000
Other assets
489,000
616,000
Total assets
$1,401,000
$1,706,000
Liabilities and Stockholders’ Equity
Current liabilities
$311,000
$332,000
Long-term liabilities
406,000
489,000
Capital stock and retained earnings
684,000
885,000
Total liabilities and stockholders’ equity
$1,401,000
$1,706,000
Annual sales
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$1,529,000
Rate of gross profit on sales
30
%
40
%...
As loan analyst for Shamrock Bank, you have been presented the following information. Toulouse Co. Lautrec...
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You are the loan officer at Corner Street Community Bank. You received a loan application from...
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received a loan application from T.P. Jarmon Company. The first
picture is for financial statements that belong to the most recent
fiscal year(s). The second picture provides financial ratios for
the industry. Analyze these financial statements in terms of
liquidity, profitability and solvency. Give an opinion on whether
you would approve the loan application or not in great detail.
2013 T. P. Jarmon Company, Balance Sheet for 12/31/2012 and...
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Required information [The following information applies to the questions displayed below.) You have been given responsibility...
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As loan analyst for Oriole Bank, you have been presented the following information. Toulouse Co. Lautrec Co. Assets SUS Cash $114,000 $330,000 Receivables 229,000 301.000 Inventories 597,000 531,000 Total current assets 940,000 1,162,000 Other assets 479,000 587,000 Total assets $1,419,000 $1,749,000 Liabilities and Stockholders' Equity. Current liabilities Long-term liabilities $314,000 402,000 703.000 $345,000 479,000 925,000 Capital stock and retained earnings Total liabilities and stockholders' equity $1,419,000 $1,749,000 Annual sales $936,000 $1,564,000 Rate of gross profit on sales 30% 40% Each...
Exercise 24-4 As loan analyst for Utrillo Bank, you have been presented the following information. Toulouse Co. Lautrec Co. Cash Receivables Inventories $120,800 224,800 578,100 $326,900 307,100 512,200 1,146,200 Total current assets Other assets 923,700 .200 617,600 502,700 $1,426,400 Total assets $1,763,800 Current liabilities Long-term liabilities Capital stock and retained earnings $290,300 397,700 738,400 $1,426,400 $931,700 $350,000 502,700 911,100 $1,763,800 $1,504,600 Total liabilities and stockholders equity Annual sales Rate of gross profit on sales 25 % 40% Each of these...
As loan analyst for Metlock Bank, you have been presented the
following information.
Toulouse Co.
Lautrec Co.
Assets
Cash
$119,000
$306,000
Receivables
217,000
289,000
Inventories
576,000
495,000
Total current assets
912,000
1,090,000
Other assets
489,000
616,000
Total assets
$1,401,000
$1,706,000
Liabilities and Stockholders’ Equity
Current liabilities
$311,000
$332,000
Long-term liabilities
406,000
489,000
Capital stock and retained earnings
684,000
885,000
Total liabilities and stockholders’ equity
$1,401,000
$1,706,000
Annual sales
$883,000
$1,529,000
Rate of gross profit on sales
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%
40
%...
You are the loan officer at Corner Street Community Bank. You
received a loan application from T.P. Jarmon Company. The first
picture is for financial statements that belong to the most recent
fiscal year(s). The second picture provides financial ratios for
the industry. Analyze these financial statements in terms of
liquidity, profitability and solvency. Give an opinion on whether
you would approve the loan application or not in great detail.
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Required information [The following information applies to the questions displayed below.) You have been given responsibility for overseeing a bank's small business loans division. The bank has included loan covenants requiring a minimum current ratio of 3.20 in all small business loans. When you ask which inventory costing method the covenant assumes, the previous loans manager gives you a blank look. To explain to him that a company's Inventory costing method is important, you present the following balance sheet information....
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