A comparative balance sheet and an income statement for Burgess Company are given below:

Burgess Company Comparative Balance Sheet (dollars in millions)
	Ending Balance	Beginning Balance
Assets
Current assets:
Cash and cash equivalents	$ 49	$ 79
Accounts receivable	645	580
Inventory	660	615
Total current assets	1.354	1,274
Property, plant. and equipment	1,515	1,466
Less accumulated depreciation	765	641
Net property, plant, and equipment	750	825
Total assets	$2,104	$2,099
Liabilities and Stockholders' Equity
Current liabilities: Accounts payable	$250	$155
Accrued liabilities	190	165
Income taxes payable	76	70
Total current liabilities	516	390
Bonds payable	450	610
Total liabilities	966	1.010
Stockholders' equity:
Common stock	161	161
Retained earnings	977	928
Total stockholders equity	1,138	1,089
Total liabilities and stockholders equity	$2,104	$2,099

Burgess Company Income Statement (dollars in millions)
Sales	$3,600
Cost of goods sold	2,550
Gross margin	1,050
Selling and administrative expenses	875
Net operating income	175
Nonoperating items: Gain on sale of equipment	3
Income before taxes	178
Income taxes	63
Net income	$ 115

1. Assume that Burgess had sales of $3,800, net income of $135, mid net cash provided by operating activities of $150 in the prior year (all numbers are stated in millions). Prepare a memo that summarizes your interpretations of Burgesss financial performance.