Debit ratio i got 0.220156 it would 22.0% however saying its incorrect (Financial statement analysis) The T. P. Jarmon Company manufactures and sells a line of exclusive sportswear. The firm's sales were $600,100 for the year just ended, and its total assetsexceeded $500,000. The company was started by Mr. Jarmon just 10 years ago and has been profitable every year since its inception. The chief financial officer for the firm, Brent Vehlim, hasdecided to seek a line of credit from the firm's bank totaling $83,000. In the past, the company has relied on its suppliers to finance a large part of its needs for inventory. However, in recent monthstight money conditions have led the firm's suppliers to offer sizable cash discounts to speed up payments for purchases. Mr. Vehlim wants to use the line of credit to supplant a large portion ofthe firm's payables during the summer, which is the firm's peak seasonal sales period.The firm's two most recent balance sheets were presented to the bank in support of its loan request. In addition, the firm's income statement for the year just ended was provided. These statementsare found in the following tables: Jan Fama, associate credit analyst for the Merchants National Bank of Midland, Michigan, was assigned the task of analyzing Jarmon's loan request.F2a. Calculate the following financial ratios for 2013:b. Which of the ratios calculated in part (a) do you think should be most crucial in determining whether the bank should extend the line of credit?c. Use the information provided by the financial ratios and industry-norm ratios to decide if you would support making the loan. Discuss the basis for your recommendation.a. Calculate the following financial ratios for 2013:T. P. Jarmon's current ratio is 1.84. (Round to two decimal places.)T. P. Jarmon's acid-test ratio is 0.72. (Round to two decimal places.)T. P. Jarmon's debt ratio is %. (Round to one decimal place.)an example Get more help -K380F3EDC$4DODDOD54F4RF%5VF5TA6MacBook Air.***.F6BY&7H44F7UN*CO8PIIFA-(9KMDDF9)OMOSISOOV4HF10LClear allPFII:>●command.+{Final check=[49skyFIZ11?option 6/2/23, 5:57 PMT. P. Jarmon Company Balance SheetsCashMarketable securitiesAccounts receivableInventoryPrepaid rentTotal current assetsNet plant and equipmentTotal assetsAccounts payableNotes payableAccrualsTotal current liabilitiesLong-term debtCommon stockholders' equityTotal liabilities and owners' equityTotalEarnings before taxesLess: TaxesNet income available to common stockholdersLess: Cash dividendsChange in retained earnings(Click on the icon2012I$15.0006,01042,10051,0001,210$115,320285,900$401,2202012(Click on the icon in order to copy its contents into a spreadsheet.)T.P. Jarmon CompanyIncome Statement for 2013Sales (all credit)Less: Cost of goods soldGross profitLess Operating and interest expensesGeneral and administrativeinterestDepreciation(30,000)$48,00014,9005,990$68,890160,000172,330$401,220in order to copy its contents into a spreadsheet)$(29,900)(10,000)(30,000)Data Table2013$14,0008.200201332,90084,0001,100$138,200270,100$408,300$56,90013.1004,990$74.990149.900183,410$408,300$600,100(460, 100)$140.000https://mylab.pearson.com/Student/PlayerHomework aspx homeworkld-649793962&questionld-9&flushed-false&cld-7403828&back-DoAssignments.aspx?view...$(69.900)$70,100(27.000)$43.100(31,900)$11.2001/1

Total current debt 2013 = $74990The long-term debt 2013 = $149,900Total assets = $408,300

Answered: Debit ratio i got 0.220156 it would…

Business

Finance

Debit ratio i got 0.220156 it would 22.0% however saying its incorrect

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter12: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 7P

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