.

Assume Peter Nelson LLP breached the duty of care owed to the Bank of Business Solutions. Were the damages sustained by the Bank of Business Solutions caused by Peter Nelsons breach of the duty of care? In answering this question do the following: (a) correct the 2004 income statement using the analysis in question 2 above; (b) perform ratio analysis on the four years income (as originally stated and then after your corrections in requirement a) to determine if the firm actually had a pattern of income stability. Calculate standard profitability ratios (Return on Sales, Gross Profit Margin, Earnings per share, plus any other analysis you wish to perform

MicroDex Income Statements For the four years ended December 31, 2004 (in 000's except per share amounts) 2001 $27,500 $26,300 $25,100 $20,900 2004 2003 2002 Net Revenues and Gains Expenses and Losses Cost of Sales Operating Expenses Other Taxes Net Income Common Shares Outstanding 9,200 2,300 2,214 2,515 $2,880 $4,438 $5,901 $4,671 3,000 15,200 12,150 3,075 3,966 2,671 3,160 4,570 1,690 9,845 2,890 3,146 3,318 3,000 3,000 3,000