BALANCE SHEET \begin{tabular}{|l|r|l|r|r|} \hline Cash & 145 & Debt & \multicolumn{1}{|c|}{} \\ \hline A/R & 0 & & 40 \\ \hline & & Equity & 10 \\ \hline Inventory & 14 & & \\ \hline Total Assets & 145 & Retained Earning & 95 \\ \hline & & Total Debt and Equity & 145 \\ \hline \end{tabular} INCOME STATEMENT Analysis % Sales Sales 100% COGS 39% GP 61% Expenses Labor Depreciation 6 Total Expenses 8 Operating Profit 9 0 Interest 1 Taxes Tax \& Interest Net Income 35%. BALANCE SHEET \begin{tabular}{|l|r|r|r|} \hline Cash & 285 & Debt & \\ \hline & & & 40 \\ \hline A/R & 15 & & 200 \\ \hline Equipment & & Equity & 100 \\ \hline Inventory & 190 & & 30 \\ \hline Total Assets & 15 & & \\ \hline & 505 & Prior Earnings & 95 \\ \hline & Retained Earning & 40 \\ \hline \end{tabular} Questions? We need to pay back the initial $40 loan from Mom. How will this impact the next balance sheet? If we grow our Sales Revenue by 10%, increasing our COGS also by 10%, but holding all other expenses the same what would our resulting Net Income be? We have determined that in using the new ice machine we actually use less lemonade per sale so our average COGS per unit is now closer to $.20 for each $1 drink we sell What is the impact to COGS? What is the impact to Net Income in the next period if we grow sales by the 10%