Comparing Loan Requests from Two Companies by Using Several Ratios (P12-5) The 2020 financial statements for Rand and Tand companies are summarized below: Statement of Financial Position Rand Tand Company Company $ 45,000 Cash $ 25,000 Accounts receivable (net) 55,000 5,000 Inventory 110,000 25,000 Property, plant, and equipment (net) 550,000 160,000 Other assets 140,000 67,000 Total assets $ 880,000 $292,000 Current liabilities $ 120,000 $ 15,000 Long-term debt (12%) 190,000 55,000 Share capital 480,000 210,000 Contributed surplus 50,000 4,000 Retained earnings 38,000 7,000 Other comprehensive income 2,000 1,000 Total liabilities and shareholders' equity $ 880,000 $292,000 Statement of Earnings Sales revenue (on credit) (1/2)$800,000 (14)$280,000 Cost of sales (480,000) (150,000) Expenses (including interest and income tax) (240,000) (95,000) Net earnings $ 80,000 $ 35,000 Selected Data from the 2019 Statements Accounts receivable, net $ 47,000 $ 11,000 Long-term debt (12%) 190,000 55,000 Inventory 95,000 38,000 Other Data Share price at end of 2020 $ 14.00 $ 11.00 Income tax rate 30% 30% Dividends declared and paid in 2020 20,000 $ 9,000 Number of common shares during 2020 24,000 10,500 These two companies are in the same line of business and in the same province but in different cities. Each company has been in operation for about 10 years. Rand Company is audited by a national accounting firm; Tand Company is audited by a local accounting firm. Both companies received an unqualified opinion (i.e., the independent auditors found nothing wrong) on the financial statements. Rand Company wants to borrow $75,000 cash, and Tand Company needs $30,000. The loans will be for a two-year period and are needed for working capital purposes.ANSWER THE 2 QUESTIONS BELOW: 1. Complete a schedule that reects a ratio analysis for Rand company and another for Tand company. Compute the below for each company, put in an excel spreadsheet: Return on equity . Return on assets Financial leverage percentage . Gross prot percentage Net profit margin Earnings per share Fixed asset turnover . Receivables turnover Inventory turnover . Current ratio k. Quick ratio 1. Cash ratio In. Debt to equity ratio n. Price/earnings ratio 0. Dividend yield ratio "r-crap rug-o 9.51 3-9: 2. Assume that you work in the loans department at 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 QUESTION 1, and any other information, give your choice and provide a supporting explanation