Amanda's Anchors has applied for a loan from a local bank. The bank is basing its decision on the following information:

Required
For Amanda's Anchors, calculate the ratios for which the bank has an industry average. After comparing Amanda's ratios to the industry averages, should the bank approve the loan? Why or why not?

Ratio Current ratio Quick ratio Receivables turnover ratio Inventory turnover ratio Debt to assets ratio Times interest earned Profit margin Return on assets Return on equity Industry Average 1.50 0.80 18.00 20.00 0.56 6.52 10.25% 11 .50% 20.30% Amanda's Anchors Income Statement For the Year Ending December 31, 2012 Sales 600,000 350,000 $250,000 100,000 $150,000 25,000 $125,000 65,000 60,000 Cost of goods sold Gross profit Operating expenses Operating income Interest expense Income before taxes Income tax expense Net income Amanda's Anchors Balance Sheet December 31, 2012 December 31, 2011 75,000 60,00 Cash Accounts receivable Inventory Prepaid insurance 30,000 30,000 5,000 140,000 600,000 140,000 20,000 20,000 5,000 105,000 550,000 110,000 Total current assets Property and equipment Accumulated depreciation Total property and 440,000 $545,000 S60,000 45,000 105,000 150,000 255,000 250,000 40,000 290,000 460,000 5600,000 equipment Total assets Accounts payable 60,000 40,000 100,000 150,000 250,000 250,000 100,000 350,000 Other current liabilities Total current liabilities Bonds payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $600,000 $545,000