The 2017 financial statements for the Thor and Gunnar companies are summarized below. These two companies are in the same


The 2017 financial statements for the Thor and Gunnar companies are summarized below.



These two companies are in the same business and in the same province but in different cities. One-half of Thor?s sales and one-quarter of Gunnar?s sales are on credit. Each company has been in operation for about ten years. Both companies received an unqualified audit opinion on the financial statements. Thor Company wants to borrow $105,000, and Gunnar Company is asking for $36,000. The loans will be for a two-year period. Neither company issued shares in 2017.


1. Calculate the ratios in Exhibit 13.5 for which sufficient information is available. Round all calculations to two decimal places.

2. Assume that you work in the loan department of a local bank. You have been asked to analyze the situation and recommend which loan is preferable. Based on the data given, your analysis prepared in requirement 1 and any other information, give your choice and the supporting explanation.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...

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Related Book For  answer-question

Fundamentals of Financial Accounting

ISBN: 978-1259269868

5th Canadian edition

Authors: Fred Phillips, Robert Libby, Patricia Libby, Brandy Mackintosh

Question Details
Chapter # 13
Section: Group B Problems
Problem: 6
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Question Posted: January 21, 2020 13:58:11