1.Interpret the figures by evaluating the firms CFO and key financial ratios.

2. Identify potential problems the firm faces.

Balance Sheet 2012 2013 Income Statement 2014 Assets Cash and marketable securities Accounts receivable $30 102 65 $6 215 104 Net sales Cost of goods sold Gross margin $861 680 181 64 60 26 31 Prepaid expenses Gross fixed assets 5 Selling expenses 120 40 80 149 General and administrative expenses Less accumulated depreciation Net fixed assets Intangible assets 57 Depreciation 92 3 5425 Operating profit Interest income Interest expense Total assets 18 Liabilities and Net Worth Notes payable-bank Current maturities of long-term debt Accounts payable Accruals Federal income tax payable Long-term mortgage Long-term debt Total liabilities Common stock Retained earnings Total net worth $106$223Profit before taxes 19 11 Income taxes 50 Net profit 14 15 32 $344 40 41 81 $425 16 212 Total liabilities and equity $289 Net worth reconciliation Beginning net worth77 s+Net profit Dividends paid (cash)1 Ending net worth 14 81 Note: Inventory was $45 million in 2011