Sunco Credit Union is considering granting a loan to Michalski Printing.. Michalski Printing is a commercial printer and, in anticipation of a major sales increase expected in the coming year, has applied for a one-year loan of $100,000 to finance an expansion of its inventory. The following excerpts are from Michalski's 2020 Statement of Financial Position: Instructions
a) Calculate the following ratios for Michalski for the years ended December 31, 2019, and 2020:
i. Current ratio
ii. Quick ratio
b) Based on your calculations, comment on whether you would recommend granting the loan.
c) What steps should you undertake before making your decision and is there other information you would like to have?

Question

Sunco Credit Union is considering granting a loan to Michalski Printing.. Michalski Printing is a commercial printer and, in anticipation of a major sales increase expected in the coming year, has applied for a one-year loan of $100,000 to finance an expansion of its inventory. The following excerpts are from Michalski's 2020 Statement of Financial Position:  Instructions 
a) Calculate the following ratios for Michalski for the years ended December 31, 2019, and 2020:
i. Current ratio
ii. Quick ratio
b) Based on your calculations, comment on whether you would recommend granting the loan.
c) What steps should you undertake before making your decision and is there other information you would like to have?

Quizplus · Accepted Answer

The Answer of Sunco Credit Union is considering granting a loan to Michalski Printing.. Michalski Printing is a commercial printer and, in anticipation of a major sales increase expected in the coming year, has applied for a one-year loan of $100,000 to finance an expansion of its inventory. The following excerpts are from Michalski's 2020 Statement of Financial Position:  Instructions 
a) Calculate the following ratios for Michalski for the years ended December 31, 2019, and 2020:
i. Current ratio
ii. Quick ratio
b) Based on your calculations, comment on whether you would recommend granting the loan.
c) What steps should you undertake before making your decision and is there other information you would like to have?

Sunco Credit Union Is Considering Granting a Loan to Michalski