The 2014 financial statements for 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 10 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 2014.
Required
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?

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Thor Gunnar Company Company Balance Sheet Cash $ 35,000 $ 54,000 Accounts Receivable, Net 77,000 6,000 154,000 30,000 Inventory Property and Equipment, Net Other Assets 770,000 192,000 68,400 196,000 $1,232,000 Total Assets $350,400 $ 168,000 $ 18,000 Current Liabilities Long-Term Debt (12% interest rate) Contributed Capital (33,600 shares; 12,600 shares) Contributed Surplus Retained Earnings 66,000 252,000 266,000 672,000 70,000 4,800 9,600 56,000 $1.232,000 $350,400 Total Liabilities and Shareholders' Equity Income Statement $1,120,000 $336,000 Sales Revenue Cost of Goods Sold (672,000) (336,000) $ 112,000 (180,000) (114,000) $ 42,000 Expenses (including interest and income tax) Net Income Selected Data from 2013 Statements $ 13,200 45,600 192,000 66,000 Accounts Receivable, Net 2$ 65,800 Inventory Property and Equipment, Net Long-Term Debt (12% interest rate) Total Shareholders' Equity 133,000 770,000 266,000 798,000 266,400 Other Data 13.20 Per share price at end of 2014 19.60