7. How critical is the financial condition of Healthy Grains Inc.? Is Dawn justified in being concerned about the need for finan- cial planning? Explain why. Table 1 Healthy Grains, Income Statement For the Year Ended Dec. 31st 2015 2015 2014 2013 4.700,000 3,877,500 822,500 275,000 90,000 25,000 3,760,000 3,045,600 714,400 250,000 90,000 25,000 3,000,000 2,400,000 600,000 215,000 90,000 25,000 Sales Cost of Goods Sold Gross Profit Selling and G & A Expenses Fixed Expenses Depreciation Expense Earnings Before Interest and Taxes Interest Expense Earnings Before Taxes Taxes @ 40% 349,400 270,000 66,000 432,500 66,000 366,500 146600 219,900 66,000 283,400 113360 204,000 81600 170,040 122,400 Net Income 131940 102024 Retained Earnings 73440 Healthy Grains Inc. Balance Sheet For the Year Ended Dec. 31st 2015 2015 2014 2013 Assets 97,376 175,000 Cash and Cash Equivalents Accounts Receivable Inventory Total Current Assets Plant & Equipment Accumulated Depreciation Net Plant & Equipment Total Assets 60,000 250,416 511,500 821,916 560,000 175,000 385,000 1,206,916 390,000 662,376 560,000 150,000 410,000 1,072,376 48,000 150,000 335,000 533,000 560,000 125,000 435,000 968,000 Liabilities and Owner's Equity Accounts Payable Notes Payable Other Current Liabilities 135,000 275,000 43,952 453,952 275,000 151,352 275,000 50,000 476,352 250,000 128,000 250,000 46,000 Total Current Liabilities 424,000 Long-Term Debt 300,000 Total Liabilities 728,952 724,000 726,352 155,560 155,560 Owner's Capital Retained Earnings Total Liabilities and Owner's Equity 322,404 190,464 155,560 88,440 968,000 1,206,916 1,072,376