Mr. George Dodge, Clarkson Lumber Company is doing well, but the question arises whether the risk is too high to grant the $750,000 line of credit request. There are many strong points, but it also has some issues to work out. This is a business that has many good characteristics and looks promising, but needs additional cash to repay its loans, inventory, and supplies. I recommend this company to benefit from the line of credit. Examining the individual ratios shown in Table 1 and comparing them to the industry average shown in Table 2 gives an idea of ​​where this company stands. The current ratio and current ratio are very low and have been declining. For 1995, the current ratio is 1.15:1, which is lower than the industry average of 1.60:1. However, to give a better idea of ​​the situation in the industry, as shown in Table 3, it is actually below average. of the poorest 25% of the industry. The quick ratio is 0.61, lower than the industry ratio of 0.90. These two ratios highlight the lack of liquidity of this company. Cash flow has decreased because it takes longer to get money from customers, but the company still has to pay for its purchases. Additionally, the company couldn't exceed the $400,000 loan limit, so it was forced to stretch its liquidity. Return on sales is decreasing and is lower than the industry average, but the good news is that sales and profits are increasing every year. However, the costs of goods are increasing and more and more inventory is left each year, leading to a decrease in return on sales. For 1995 it was 1.7%, which is below the average of 2.44%, but well above the poorest 25% of companies, as shown in Table 3, which actually have a return negative sales of 0.7%. Return on equity increases every year and at a rate higher than the industry average. In 1995, it was 20.7%, higher than the average of 18.25% and close to the highest companies in Table 3, 22.1%, which shows that the company's ROI is increasing, which is good for the owner. is also down and below the industry average. For example, in 1995, it was 4.7%, less than the average for 6.