\begin{tabular}{|c|c|c|c|} \hline NVBalanceDecemberAsse & ESheet31,2023ts & & \\ \hline Current assets & & & \\ \hline Cash & & $450,000 & \\ \hline Accounts receivable & & 200,000 & \\ \hline Short-term securities & & 28,000 & \\ \hline Imventory & & 80,000 & \\ \hline Supplies & & 2,000 & \\ \hline Prepaid insurance & & 10,000 & \\ \hline Total current assets & & & $770,000 \\ \hline Long-term investments & & & \\ \hline Imvestments in real estate & & & 120,000 \\ \hline Property, plant, and equipment & & & \\ \hline Land & & 180,000 & \\ \hline Equipment & $500,000 & & \\ \hline Less:Accumulateddepreciation(equipment) & 30,000 & 470,000 & \\ \hline & & & 650,000 \\ \hline IntangibleassetsCapyrights & & & 125,000 \\ \hline Tatal assets & & & $1,665,000 \\ \hline Liabilities and Stor & kholder's F & Equity & \\ \hline Current liabilities & & & \\ \hline Account pryable & & $60,000 & \\ \hline Notes payable & & 10,000 & \\ \hline Interest payable & & 2,000 & \\ \hline Salaries and wages payable & & 15,000 & \\ \hline Unearned sale revenue & & 9,000 & \\ \hline Total cufrent liabilities & & & $96,000 \\ \hline Long-term liabillities & & & \\ \hline Notes payable & & 40,000 & \\ \hline Interest payable & & 22,000 & \\ \hline Total long-term liabilities & & & 62,000 \\ \hline Total liabilities & & & 158,000 \\ \hline Stockholder's equity & & & \\ \hline Commen stock & & 507,000 & \\ \hline Retained earnings & & $1,000,000 & \\ \hline Total stockholder's equity & & & 1,507,000 \\ \hline Total liabilities and stoxkhold & r's equity & & $1,665,000 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|c|}{NVEIncomeStatementFortheYearEndedDecember31,2023} \\ \hline \multicolumn{3}{|l|}{ Sales } \\ \hline Sales revenue & & $3,500,000 \\ \hline Less: Sales discounts & $70,000 & \\ \hline Sales returns and allowances & 35,000 & 105,000 \\ \hline Net sales & & 3,395,000 \\ \hline Cost of goods sold & & 1,800,000 \\ \hline Gross profit & & 1,595,000 \\ \hline \multicolumn{3}{|l|}{ Operating Expenses } \\ \hline Freight-out & 5,000 & \\ \hline Depreciation expense & 60,000 & \\ \hline Insurance expense & 20,000 & \\ \hline Advertising expense & 10,000 & \\ \hline Rent expense & 32,000 & \\ \hline Salaries and wages expense & 210,000 & \\ \hline Utility expense & 4,000 & \\ \hline Total operating expenses & & 341,000 \\ \hline Income from operations & & 1,254,000 \\ \hline \multicolumn{3}{|l|}{ Other revenues and gains } \\ \hline Gain on disposal of plant assets & 3,000 & \\ \hline Interest revenue & 7,000 & 10,000 \\ \hline \multicolumn{3}{|l|}{ Other expenses and losses } \\ \hline Loss from abandonment of property & 3,000 & \\ \hline Interest expense & 6,000 & 9,000 \\ \hline Income before taxes & & 1,255,000 \\ \hline Income tax expense & & 255,000 \\ \hline Net income & & $1,000,000 \\ \hline \end{tabular} Scenario 2 On a whim, you buy a scratch-off lottery ticket and win $10,000. You decide that the prudent action would be to invest this money by purchasing shares of a publicly traded company. Your friend, Natalie, recommended that you should look at NVE (computer hardware) because she believes that its stock is a safe investment with significant growth potential. You decide to pull financial information related to NVE from the internet (see pages 25 ). Required Analyze the financial statements and decide whether you would purchase shares of Escalade? Be sure to provide justification for your decision. My expectation is that you perform a ratio analysis and, in your justification, discuss the results of that analysis in relation to the industry averages. Adiditional information 1. Cash dividends of $9,000 were declared and paid in 2023 . 2. Weighted-average number of shares of common stock outstanding during 2023 was 52,000 shares. 3. There are no preferred dividends. 4. Market value of common stock on December 31, 2023, was $21 per share. 5. Industry averages: - Current ratio-4:1 - Return on equity (ROE) - 16.4% - Price/earnings ratio -18.4 times - Earnings per share $1.35 - Average collection period-31.2 days - Average days in inventory-27.1 days - Quick ratio 2:1 - Times interest earned-6.0 times - Profit margin 22.2% - Return on assets 50.9% - Debt ratio-15\% - Equity ratio-85\% \begin{tabular}{|c|c|c|c|} \hline NVBalanceDecemberAsse & ESheet31,2022ts & & \\ \hline Current assets & & & \\ \hline Cash & & $700,000 & \\ \hline Acxounts receivable & & 109,000 & \\ \hline Shart-term securities & & 30,000 & \\ \hline Imventory & & 50,000 & \\ \hline Supplies & & 5,000 & \\ \hline Prepaid insurance & & 6,000 & \\ \hline Total current assets & & & $900,000 \\ \hline Long-term investments & & & \\ \hline Imvestments in real estate & & & 100,000 \\ \hline Property, plamt, and equipment & & & \\ \hline Land & & 150,000 & \\ \hline Equipment & $110,000 & & \\ \hline Less:Accumulateddeprexiation(equipment) & 25,000 & 85,000 & 235,000 \\ \hline Intangible assets & & & \\ \hline Copyriehts & & 90,000 & \\ \hline Trademarks & & 75,000 & \\ \hline Total intangible assets & & & 165,000 \\ \hline Tatal assets & & & $1,400,000 \\ \hline Liabilities and Stoc & Wholder's F0 & auity & \\ \hline Current liabilities & & & \\ \hline Account parable & & $45,000 & \\ \hline Nates payable & & 5,000 & \\ \hline Interest payable & & 2,000 & \\ \hline Mortgage Payable & & 25,000 & \\ \hline Salaries and wages payable & & 12,000 & \\ \hline Unearned service revenue & & 15,000 & \\ \hline Total current liabilities & & & $104,000 \\ \hline Long-term liabillities & & & \\ \hline Nates payable & & 10,000 & \\ \hline Interest payable & & 28,000 & \\ \hline Mortgage Payable & & 220,000 & \\ \hline Total long term liabilities & & & 258,000 \\ \hline Total liabilities & & & 362,000 \\ \hline Stockholder's equity & & & \\ \hline Common stock & & 238,000 & \\ \hline Retained earnings & & 800,000 & \\ \hline Total stoxkholder's equity & & & 1,038,000 \\ \hline Tatal liabilities and stockhold & ler's equity & & $1,400,000 \\ \hline \end{tabular}