Below MAG Financial info for last 3 years.

2006 , Revenue: $323,068, Cost of Sale $202,233, Operating Income: -$27,046, Net Income -$48,174 Total Asset $142,123, Liabilities $142,123, Acid test 0.5:1 Age of Inventory 84.6 days, Age of Payables 166 days

2007, Revenue: $362,059, Cost of Sale $205,080, Operating Income: $20,542 , Net Income $419 Total Asset $147,807, Liabilities $147,807, Acid test 0.11:1 Age of Inventory 90 days, Age of Payables 125.9 days

2008 , Revenue: $341,334, Cost of Sale $193,422, Operating Income: $18,779,Net Income -$4,639 Total Asset $202,111, Liabilities $202,111, Acid test 0.07:1 Age of Inventory 94.5 days, Age of Payables 140.6 days

Although MAGs profitability had not met expectations over the past few years, the business had recognized a small profit in the first half of 2009, and Pal was hopeful that performance would continue to improve as the market recovered. Pal believed that 2009 sales would return to at least 2007 levels until the final effects of the recession ended. Cost of goods sold was expected to decrease by two per cent of sales from the 2008 level because of improved inventory control. Recent financial woes had forced Pal to reevaluate MAGs operating expenses. With a focus on reducing advertising, employee wages and administration costs, Pal believed he could easily decrease total operating expenses by 25 per cent for fiscal 2009. What is your thought on this financial figure, and what can you recommend to do their Status Quo/costing cost? Can you expand your answer by showing some numbers and calculations? Can you show your estimation for 2009 by breaking down the computation,.