Financial Statement Analysis Project. This project will allow you to explore financial statement analysis as you consider a companys loan request. Your team members comprise the lending committee for Albuquerque State Bank (ASB). Grocery Warehouse Corporation (GWC) has asked your bank to loan $2.5 million to the company to finance its proposed acquisition of an existing grocery wholesale company in Nevada. GWC has provided its compiled financial statements for 2021 and 2020. The company also provided its budgeted income statement for the year ended December 31, 2021. You also have access to certain summary information for years prior to 2020. Finally, you have obtained selected benchmarks for GWCs industry (NAICS Code 424410 General Line Grocery Merchant Wholesalers, SIC Code 5141 Groceries, General Line). Selected Industry Benchmarks for 2021 Current ratio 1.53 Quick ratio 0.66 Accounts receivable turnover ratio 14.84 Inventory turnover ratio 10.63 Accounts payable turnover ratio 31.30 Debt-to-equity ratio 1.70 Gross profit margin 20.57% Operating income margin 5.44% Net profit margin 2.45% Your team, in its capacity as the lending committee for ASB, must decide if the bank will grant the loan to GWC. The requirements for this project are listed below.

1. Develop a list of questions to ask GWCs management (your instructor) to obtain additional information that will help your lending committee consider the loan request.

2. Arrive at a definitive conclusion to either grant or deny the requested loan.

3. Illustrate key ratios and metrics you utilized to reach your conclusion.

4. Summarize your most important observations using a bullet-point list.