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  Company LMN is reviewing its financial statements for the quarter ended June 30th, 20XX. The income statement indicates total revenues of $800,000 and total expenses of $600,000, resulting in net income of $200,000. The balance sheet shows total assets of $2,500,000, total liabilities of $1,000,000, and total stockholders' equity of $1,500,000.

  Requirements:

  • Calculate the gross profit margin and net profit margin for Company LMN.
  • Analyze the liquidity position by calculating the current ratio and quick ratio.
  • Assess the return on equity (ROE) for Company LMN.
  • Provide recommendations for improving profitability and financial stability based on the analysis.