ABC CORPORATION
OPERATING BUDGET
QUARTER 1
	PRIOR QUARTER	BUDGETED PROJECTION NEXT QUARTER	VARIANCE	VARIANCE (%)
Revenue
Sales Revenue	10,000,000.00	15,000,000.00	(5,000,000.00)	-50.00%
Interest Income	512,000.00	800,000.00	(288,000.00)	-56.25%
Investment Income	180,000.00	150,000.00	30,000.00	16.67%
Other Income	45,000.00	50,000.00	(5,000.00)	-11.11%
Total Income	10,737,000.00	16,000,000.00	(5,263,000.00)	-49.02%
Cost and Expenses
Advertising	120,000.00	100,000.00	20,000.00	16.67%
Health Insurance	460,000.00	500,000.00	(40,000.00)	-8.70%
Installation/Repair of Equipment	50,000.00	50,000.00	0.00	0.00%
Inventory Purchases	560,000.00	750,000.00	(190,000.00)	-33.93%
Salaries	2,500,000.00	2,500,000.00	0.00	0.00%
Supplies	850,000.00	750,000.00	100,000.00	11.76%
Insurance	135,000.00	150,000.00	(15,000.00)	-11.11%
Rent / Lease Payments	100,000.00	100,000.00	0.00	0.00%
Other Expenses	65,000.00	100,000.00	(35,000.00)	-53.85%
Total Expenses	4,840,000.00	5,000,000.00	(160,000.00)	-3.31%
Net Profit / Loss	5,897,000.00	11,000,000.00	(5,103,000.00)	-86.54%
Income Tax Expense (35%)	2,063,950.00	3,850,000.00	(1,786,050.00)	-86.54%
Net Earning After Tax	3,833,050.00	7,150,000.00	(3,316,950.00)	-86.54%

please explain how this operation budget affects the company's performance and its future resolutions

please calculate the solvency ratio and explain its outcome