^{Can anyone please answer the questions and explain the answers? need to study for this course. thank you}

INCOME STATEMENT Year 2020 2019 Sales 825,798 733,469 Costs of Goods Sold 306,726 387,290 Gross Profit 519,072 346,179 Operating Expenses Salaries and benefits 55000 60000 Rent 10000 10000 Repairs and Maintenance 5000 9000 DEWA 11000 12500 License 3000 3000 Advertising Expenses 15000 15800 Fuel (delivery trucks) 12,000 7400 Management Fees 21000 23000 Depreciation and Amortization 41000 38,000 Interest Expense 23206 47,390 Total Expenses 196206 226,090 Profit before Tax 322,866 120,089 Tax @ 5% 16143.3 6004.45 Net Income 306,723 114,085 Dividends Paid @ 40% 122689.1 45633.82 2019 BALANCE SHEET Year 2020 Current Assets Cash 66,870 Accounts Receivable 40,681 Inventories 81,209 Total CA 188,760 Gross Fixed Asset 563,297 Less Depreciation 41,000 Net Fixed Assets 522,297 Total Assets 711,057 44,261 31,363 60,382 136,006 468,604 38,000 430,604 566,610 Current Liabilities Accounts Payable 53,181 Notes Payable 38,929 Total CL 92,110 Long term debt 210,408 Total Liabilities 302,518 31,423 35,654 67,077 192,827 259,904 Equity Retained Earnings 68,451 Equity 340,088 Total Equity 408,539 Total Land E 711,057 252,484 54,222 306,706 566,610 CASH FLOW STATEMENT (2020) Operating Activities Net Income 306,723 Add Depreciation 3000 Add Increase in A/P 21,758 Less Increase in A/R 9,318 Less Increase in Inventory 20,827 Net Operating Cash Flow 301,336 Investing Activities Long Term Assets Net Investing Profit after NOCF 94,693 206,643 Financial Activities Long Term Debt Notes Payable Equity Dividend Net Cash from Financing Activities 17,581 3,275 285,867 122689.1 184,034 SUMMARY Net Change in Cash Cash at the beginning of year Cash at the end of the year 22,609 44,261 66,870 OTHER DATA Year 2020 Sales 825,798 NOPAT 328768.4 NOWC 96,650 Operating Capital 618,947 Net Income 306,723 Net Cash Flow 347,723 NOCF 369768.4 FCF 209,354 2019 733,469 159105.05 68,929 499,533 114,085 152,085 197105.05 QUESTIONS: 1. Based on the financial statements, what key variable among risk, growth, leverage, or profit margins is driving the value of firm? 2. Based on the financial statements, what would be the path you would choose to enhance its value in the future? INCOME STATEMENT Year 2020 2019 Sales 825,798 733,469 Costs of Goods Sold 306,726 387,290 Gross Profit 519,072 346,179 Operating Expenses Salaries and benefits 55000 60000 Rent 10000 10000 Repairs and Maintenance 5000 9000 DEWA 11000 12500 License 3000 3000 Advertising Expenses 15000 15800 Fuel (delivery trucks) 12,000 7400 Management Fees 21000 23000 Depreciation and Amortization 41000 38,000 Interest Expense 23206 47,390 Total Expenses 196206 226,090 Profit before Tax 322,866 120,089 Tax @ 5% 16143.3 6004.45 Net Income 306,723 114,085 Dividends Paid @ 40% 122689.1 45633.82 2019 BALANCE SHEET Year 2020 Current Assets Cash 66,870 Accounts Receivable 40,681 Inventories 81,209 Total CA 188,760 Gross Fixed Asset 563,297 Less Depreciation 41,000 Net Fixed Assets 522,297 Total Assets 711,057 44,261 31,363 60,382 136,006 468,604 38,000 430,604 566,610 Current Liabilities Accounts Payable 53,181 Notes Payable 38,929 Total CL 92,110 Long term debt 210,408 Total Liabilities 302,518 31,423 35,654 67,077 192,827 259,904 Equity Retained Earnings 68,451 Equity 340,088 Total Equity 408,539 Total Land E 711,057 252,484 54,222 306,706 566,610 CASH FLOW STATEMENT (2020) Operating Activities Net Income 306,723 Add Depreciation 3000 Add Increase in A/P 21,758 Less Increase in A/R 9,318 Less Increase in Inventory 20,827 Net Operating Cash Flow 301,336 Investing Activities Long Term Assets Net Investing Profit after NOCF 94,693 206,643 Financial Activities Long Term Debt Notes Payable Equity Dividend Net Cash from Financing Activities 17,581 3,275 285,867 122689.1 184,034 SUMMARY Net Change in Cash Cash at the beginning of year Cash at the end of the year 22,609 44,261 66,870 OTHER DATA Year 2020 Sales 825,798 NOPAT 328768.4 NOWC 96,650 Operating Capital 618,947 Net Income 306,723 Net Cash Flow 347,723 NOCF 369768.4 FCF 209,354 2019 733,469 159105.05 68,929 499,533 114,085 152,085 197105.05 QUESTIONS: 1. Based on the financial statements, what key variable among risk, growth, leverage, or profit margins is driving the value of firm? 2. Based on the financial statements, what would be the path you would choose to enhance its value in the future