PRBLM:
2006 2005
Balance Sheet
Current Assets $21,000 14,000
Long-term assets 52,000 50,000
Current Liabilities 9,000 7 ,000
Long-term Liab 24,000 26,000
Contributed Cap 25,000 25,000
Retained Earnings 15,000 6,000

Income Statement
Revenues 74,000 70,000
Expenses 56,000 53,000

Statement of cash Flow
Net Cash from operating activities 9,000 15,000
Net cash from investing activities (12,000) (14,000)
Net cash from financing activities 5,000 7,000
Change in cash balance 2,000 8,000
Beginning cash balance 9,000 1,000
Ending cash balance $11,000 $9,000

Assume that you a bank loan officer review the financial statement, and recommend whether Ginny's Fashions should be considered for a loan. Support your recommendation with financial ratios. Assume a tax rate of 30%. Interest expense is $2,000 in 2006 and $2,000 in 2005.

I am trying my best to get a good understanding of this homework but I can't. Please help.

Since it's an assignment using ratios, I would hope they've been teaching these ratios and they should be in your textbook. I don't know if they're wanting you to use specific ones that you have been working on, or whatever you can manage to find.

This is a pretty good site listing many different ratios, with a fair amount of commentary on them:
Investopedia.com: Financial Ratio Tutorial (http://www.investopedia.com/university/ratios/)
There's a lot of them here, so if you're supposed to be using a certain set of them, you might have to fish through to find them. (There's some you can't use simply because you don't have the info. Which leads me to believe they want you to stay fairly simplified.)

If there are certain ones you simply can't understand what they mean, then ask about those specific ones. However, we're not here to do your homework for you so we're not here to try to give you an answer to the problem, but we can help understand any specific ratios.

I wouldn't want to answer the question anyway. These ratios don't always have a lot of meaning without comparing to industry averages. Which is why I hate these kind of assignments -- doing a bunch of math to get a bunch of numbers that you don't even have anything to compare them to.

Just for fun, if you want to compare any with real companies, you can go here:
Yahoo! Finance (http://finance.yahoo.com/)
Near the top left by Get Quote, just type in any company you want. On the left side there's a column and clear down at the bottom are the financial statements. This site has been used at a lot of schools to do these types of assignments on real companies.

I need help on understanding how to do a cash basis income statement and an accrual basis income statement and please show me how to set up a statement. This is the problem.
1. Sold instruments to customers for 10,000; received 6,000 in cash and the rest on account. The cost of the instruments was 7,000.

2. Purchased 4,000 of new instruments inventory; paid 1,000 in cash and owed the rest on account.

3. Paid 600 in wages for the month.

4. Received a 200. Bill for utilities that will be paid in April.

5. Received 1,000 from customers as deposits on orders of new instruments to be sold to the customers in April.

Littlemoe, please start your own thread rather than tacking it onto a (completely unrelated) thread of someone else's.