Need help with question 2 dealing with ratios and 3 if the bank should give the loan or not and why
Metro State - ACC 210
ACCOUNTING CASE 3 - SELF-EMPLOYED: Metro Accounting LLC Peter Ramirez asked for a loan of $40,000 to grow the business. The US Bank loan officer requested the financial statements as of April 30, 2014
The loan officer wants to see the Balance Sheet, Income Statement , the Statement of Cash Flow, and the basic financial ratios Requirements:
1) Use the financial statements attached and prepare the Statement of Cash Flows for the period March 1 - April 30 2014. Use the guidelines learned in Chapter 12 of your
textbook. YOU CAN DEVELOP YOUR CASH FLOW STATEMENT IN THE OPEN TAB OF THE TEMPLATE OR OTHER MEAN.
2) Calculate the following financial ratios as of April 30, 2014 ( use the guidelines learned in Chapter 13 of your textbook): Acid Test Ratio, Current Ratio, Current Ratio,
Debt Ratio, Profit Margin, and Return on Common Stockholder's Equity.
3) Brief comments on the following: based on your financial analysis do you think the Bank would give Peter the loan? Respond Yes or NO and your reasoning about that. Statement of Cash Flows
For Period March 1, 2014 - April 30, 2014
Cash flows from Operating Activities
Income to reconcile net income to net cash provided by
Increase in accounts recievable
Increase in pre-paid expenses
Increase in accounts payable
Net cash provided by operating activities
Cash flows from investing activities
Cash received from sale of plant assets
Cash paid for purchase of campany assets
Net cash provided by investing activities
Cash flows from financing activities
Cash received from issuing stock
Cash paid for owner's distributions
Net cash used in financing activities
Net increase in cash
Cash balance at prior month-end
Cash balance at current year-end $ 7,435 $ (3,500)
$ (37,990) STUDENT NAME:
Metro Accounting LLC
For the Period: March 1 - April 30, 2014
Accounting Services Fees $10,650 Total Revenues
Legal and Professional Fees
Licenses and Permits
Meals & Entertainment
Wages & Salaries Total Expenses
Net Income Total 10,650.00 700
$ 7,435.00 STUDENT NAME:
Metro Accounting LLC
March 31 2014
Machinery & Equip-Computers
Machinery & Equip-Cell Phones
Furniture & Fixtures
Vehicle Total Assets Liabilities
25,000 $50,880 Credit Card Payable
Notes Payable Toyota Corp $2,895
$24,000 Total Liabilities 26,895 Equity
Total Liabilities and Equity $ 18,000
50,880 Acid Test Ratio, Current Ratio, Current Ratio, Debt Ratio, Profit Margin, and Return on Common Stockholder's Equity.
Debt Ratio= Total liabilities / total assets
Profit margin = net income / net sales ockholder's Equity.
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