21) the Harrison Bicycle Company

The Harrison Bicycle Company had the followmg operating results for 20182019. In addition, the company paid leldEndS in both 2018 and 2019 of $200,000 per year and made capital expenditures in both years of $230,000 per year, The company's stock price in 2018 was $14.20 and $12.50 in 2019. Also in 2019, the industry average earnings multiple for the bicycle industry was 8 and the free cash flow and sales multiples were 16 and 1.35, respectively, The company is publicly owned and has 1,300,000 shares ofoutstanding stock at the end of 2019. Balance sheet, Dec 31, 2019 2018 Cash 3 279,999 $ 193,999 Accounts Receivable $ 528,000 3 403,000 Inventory 3 453,000 $ 303,000 Total Current Assets $1,251,000 3 809,000 Longelived Assets 1,220,000 1,115,000 Total Assets $2,471,000 $1,924,000 Current Liabilities $ 593,999 3 393,999 Long-term Debt 630,000 530,000 shareholder Equity 1,338,000 1,091,000 Total Debt and Equity $2,471,000 $1,924,000 Income Statement, for year ended Dec 31, 2019 2018 Sales $5,339,999 $5,350,000 Cost of Sales 5,175,000 4,440,000 Gross Margin 1,155,000 910,000 Operating Expenses 520,000 460,000 Operating Income 635,000 450,000 Taxes 188,000 199,000 Net Income 3 447,000 $ 251,000 Cash Flow From Operations 2019 2018 Net Income $ 447,000 $251,000 Plus Depreciation Expense 125,000 125,000 + Decrease (finc) in AccRec. and Inv. (275,000) 7 + Increase (-dec) in Cur. Liabl. 200,000 7 Cash Flow from Operations $ 497,000 $376,000 Return on assets for 2019 is (rounded)