13. Part 3: The Attached picture shows the condensed financial statements for Debi's Doorbells Incorporated for the past 2 years. Use this information to:

e) If you were a bank, would you lend money to Debi's Doorbells? Why or why not? (3T)

f) If you were Debi's Doorbells' accountant and they needed to raise money, would you suggest debt financing (borrowing money) or selling more common shares? Why? (3T)

Debi's Doorbells 2018 2019 Condensed Income Statement Total Revenue 400 000 700.000 Cost of Goods Sold (150 000) (300,000) Gross Profit 250 000 400 000 Operating Expenses (100 000) (200 000) Operating Income 150 000 200 000 Other Income 10 000 30 000 Interest Expenses (20 000) (10 000) Net Income Before Taxes 140 000 220 000 Income Tax Expense (30 000) (50 000) Net Income 110 000 170 000 Debi's Doorbells 2018 2019 Condensed Balance Sheet Current Assets 200 000 100,000 Long-Term Assets 800 000 800.000 Total Assets 1 000 000 900 000 Current Liabilities 50 000 100 000 Long-Term Liabilities 800 000 750 000 Total Liabilities 850 000 850 000 Average Shareholder's Equity 150 000 50 000 Total Liabilities + Owners Equity 1 000 000 900 000