Problem 13-18A Common-Size Statements and Financial Ratios for a Loan Application LO13-1, LO13-2, L013-3, LO13-41 Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents. Although the company has been fairly profitable, it is now experiencing a severe cash shortage. For this reason, it is requesting a $530,000 long-term loan from Gulfport State Bank, $115,000 of which will be used to bolster the Cash account and $415,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow: Sabin Electronics Comparative Balance Sheet This Year Last Year Assets Current assets: Cash 82,000 180,000 Marketable securities 21,000 Accounts receivable, net 330,000 516,000 Inventory 980,000 625,000 Prepaid expenses 22,000 25,000 1,181,000 1,600,000 Total current assets Plant and equipment, net 1,570,200 1,400,000 $3,170,200 2,581,000 Total assets Liabilities and Stockholders Equity Liabilities 815,000 460,000 Current liabilities Bonds payable, 12% 750,000 750,000 1,565,000 1,210,000 Total liabilities Stockholders' equity: Common stock, $15 par 780,000 780,000 591,000 825,200 Retained earnings Total stockholders' equity 1,605,200 1,371,000 Total liabilities and equity $3,170,200 2,581,000