Amy Farrah Fowler was just elected as Finance officer of Big Bang County and has started her first day in the office. Amy is trying to deal with the following information in the year 2020: Shareholders' equity $650,000; net income $80,000; dividends paid $18,000. The company provides a 10% return on equity. Sales are $100,000 on total assets of $140,000 and total equity of $85,000.

In the year 2021, the firm has a net income of $32,000 which provides a 12% return on assets. The firm has a debt-equity ratio of .40. Amy is evaluating the following information: Interest expense $2,000; times interest earned 5; cash coverage ratio 5.5.

Requirements:

1) Calculate the sustainable growth rate for the company in 2020.

2) What is the profit margin in 2020?

3) What is the return on equity in 2021?

4) Calculate the depreciation expense for 2021.

5) Comment on the liquidity and solvency position of the company based on the information given in 2020 and 2021.