Each of these companies has requested a loan of 49970 for 6

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Reference no: EM13576028

	Plunkett Co.		Herring Co.
Assets
Cash	$128,100		$327,700
Receivables	222,300		303,600
Inventories	575,100		512,400
Total current assets	925,500		1,143,700
Other assets	496,000		616,300
Total assets	$1,421,500		$1,760,000

Liabilities and Stockholders' Equity
Current liabilities	$307,500		$350,000
Long-term liabilities	408,600		496,000
Capital stock and retained earnings	705,400		914,000
Total liabilities and stockholders' equity	$1,421,500		$1,760,000
Annual sales	$936,000		$1,516,200
Rate of gross profit on sales	30	%	40	%

Each of these companies has requested a loan of $49,970 for 6 months with no collateral offered. In as much 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.

	Plunkett Co.		Herring 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

Reference no: EM13576028

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