A First Nation Band through their Economic Development Department has made an offer to purchase a metal fabrication business called Metals Limited. Metals Limited is located in the city of Sault Ste. Marie. There will be strong demand for the companys products and services as the local steel mill often requires metal fabrication work and regularly needs to go out of town to find a company that can complete the work. The opening balance sheet on the first day of business on January 1, 2021, included the following: Cash $100,000, Inventory $75,000, Equipment $500,000 cost, and Long Term Bank Loan $300,000. Equity needs to be calculated. During the year, the following items impacted the balance sheet by the end of the fiscal year December 31, 2021 since the opening day: Cash increased by $150,000, Inventory increased by $50,000, accounts receivable had a balance as at December 31, 2021, of $150,000, accounts payable had a balance as at December 31, 2021, of $50,000, and $50,000 of the long term bank loan was paid. During the 2021 year, Metals Limited incurred the following income statement items: sales revenue of $2 Million, cost of goods sold of $900,000, depreciation of $100,000, wages of $400,000, utilities of $125,000, rent of $25,000, interest of $50,000 and other expenses of $150,000.

question:

For the year ending December 31, 2021, provide an explanation on the profitability of Metals Limited and the strength or weakness of the balance sheet using the ratios that you calculated.