13. The Attached picture shows the condensed financial statements for Debi's Doorbells Incorporated for the past 2 years. Use this information to: NOTE* This question is broken into 3 parts, make sure you complete all 3 a) Complete a horizontal analysis of Debi's Doorbells using 2018 as the base year: (5K) (See picture 2) Formatting note - you can just record the Account names and the percentages. Formatting example: Revenue = 306% Net income = -30% Gross profit = 12% etc 13. Part 2: The Attached picture shows the condensed financial statements for Debi's Doorbells Incorporated for the past 2 years. Use this information to: b) Calculate the Gross Profit Margin for Debi's Doorbells in both years. The average for the industry is 50%. How does Debi's Doorbells compare to the industry average? (3T) c) Calculate the Current Ratio for Debi's Doorbells in both years. The industry average is 1.5 Assets: 1 Liability. How does Debi's Doorbells compare to the industry average? (3T) d) Calculate the Return on Equity for Debi's Doorbells in both years. The Industry Average is 30%. How does Debi's Doorbells compare to the industry average? (3T) 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) 2018 2019 Debi's Doorbells Condensed Income Statement Total Revenue Cost of Goods Sold Gross Profit 400 000 (150 000) 250 000 700.000 (300,000) 400 000 Operating Expenses Operating Income (100 000 150 000 (200 000) 200 000 Other Income Interest Expenses 10 000 (20 000) 30 000 (10 000) Net Income Before Taxes 140 000 220 000 Income Tax Expense Net Income (30 000) 110 000 (50 000) 170 000 2018 2019 Debi's Doorbells Condensed Balance Sheet Current Assets Long-Term Assets Total Assets 200 000 800 000 1 000 000 100,000 800,000 900 000 Current Liabilities Long-Term Liabilities Total Liabilities 50 000 800 000 850 000 100 000 750 000 850 000 Average Shareholder's Equity Total Liabilities + Owners Equity 150 000 1 000 000 50 000 900 000 2018 2019 Debi's Doorbells Horizontal Analysis Revenue Cost of Goods Sold Gross Profit 0% 0% 0% Operating Expenses Net Income 0%