1. Determine how much cash the company has on hand.

2. Perform ratio analysis on ABC Company. Calculate current ratio, quick ratio, debt ratio, debt to net worth ratio, times interest earned, average inventory turnover ratio, average age of inventory, receivables turnover ratio, average collection period ratio, payables turnover ratio, average payable period ratio, total asset turnover ratio, gross profit on sales ratio, operating profit on sales ratio, net profit on sales ratio, net profit to assets ratio and net profit to equity ratio. (please include formulas for calculations)

3. ABC is considering building another storeroom and needs $1 million in external financing. List in detail 3 likely sources of debt and 3 likely sources of equity.

4. After considering these sources, what would be your recommendation in terms of how the business should fund the new storeroom? You must justify your answers and be as quantitative as possible.

ABC Co.
Income Statement
For the Year Ended December 31
Sales revenue		958337
Cost of goods sold		701677
Gross profit		256660
Less: Operating expenses
Salaries expense	125970
Utilities expense	5440
Depreciation expense	18600
Advertising expense	14200
Other operating expenses	5550
Total operating expenses		169760
Income before interest and income taxes		86900
Interest expense		3100
Income before income taxes		83800
Income taxes @ 27%		22626
Net income $		61174

ABC Co.
Statement of Retained Earnings
For the Year Ended December 31
Beginning balance	61000
Add net income for the year	61174
	122174
Less dividends paid	8350
Ending balance $	113824

ABC Co.
Balance Sheet
As of December 31
Assets
Current assets
Cash	45121
Accounts receivable	64200
Inventory	199003	308324
Investments		49000
Property, Plant, and Equipment
Land		109300
Building and Equipment	232600
Accumulated depreciation	-122700	109900
Total assets $		576524
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	146300
Notes payable	48000
Income tax payable	9000
Mortgage loan (current portion)	14600	217900
Long-term liabilities
Mortgage loan		142800
Total liabilities		360700
Common stock	102000
Retained earnings	113824
Total stockholders' equity		215824
Total liabilities and owners' equity $		576524