• 
  

  Company XYZ is analyzing its financial statements for the year ended December 31st, 20XX. The income statement indicates total revenues of $1,500,000 and total expenses of $900,000, resulting in net income of $600,000. The balance sheet shows total assets of $4,000,000, total liabilities of $1,500,000, and total stockholders' equity of $2,500,000.

  Requirements:

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