Income Statement
Revenues: 28,000
Less: Operating Expenses
Rent Expense 1,200
Salaries Expense 4,500
Utilities Expense 300
Insurance Expense 100
Supplies Expense 400
Depreciation Expense 500
7,000
7,000
21,000
Balance Sheet
Assets:
Cash 101,800
Accounts Receivable 20,000
PP In 1,100
Supplies 2,600
Equipment 55,000
Accumulated Depreciation (500)
Total Assets 180,000
Liabilities and Stockholders’ Equity
Liabilities:
Accounts Payable 8,000
Salaries Payable 3,000
Total Liabilities 11,000
Stockholders’ Equity:
Common Stock 150,000
Retained Earnings 19,000
Total Stockholders’ Equity 169,000
Total Liabilities and Stockholders’ Equity 180,000
Perform 2 different types of ratio analysis.
Which type of ratio is best suited for an outside potential investor?
Show the equations for each of your ratios, and explain why you chose them.