2017 2018

BALANCE SHEETS:

Cash 120,000 160,000

Accounts Receivable 520,000 620,000

Inventory 305,000 290,000

Fixed Assets, net 410,000 510,000

Total Assets 1,355,000 1,580,000

Liabilities and Equity:

Accounts Payable 350,000 375,000

Long-term Debt 500,000 625,000

Common Stock 50,000 75,000

Retained Earnings 455,000 505,000

Total Liabilities and Equity 1,355,000 1,580,000

INCOME STATEMENT:

Revenue 3,500,000

Cost of Goods Sold 2,275,000

General and Administrative 515,000

Depreciation Expense 120,000

Earnings Before Interest and Taxes 590,000

Interest Expense 40,000

Pretax Net Income 550,000

Income Taxes 167,000

Net Income 383,000

If Gannon had 100,000 common shares outstanding during 2018 and its stock is currently worth $48.58 per share, what is the firms Price : Earnings (PE) ratio?

If Gannon projects 2019 sales to increase by 15% over 2018, its after-tax profit margin to remain the same, and anticipates a 36% dividend payout ratio, what are its projected retained earnings by the end of 2019?

Assuming that Gannons net working capital varies directly with sales, based on a 15% sales increase in 2019, what is the projected (or pro forma) accounts receivable balance at the end of 2019?

If Gannon projects that by the end of 2018, it was operating at 68% of capacity, what is its full level capacity of sales?