Complete the following questions and ratio sheet using the financial statements provided;

Financial Analysis Project Answer 1. Using the data from the Balance Sheet at 2/28 and the Profit & Loss 1/1-2/28 statement, calculate the financial ratios listed on the attached page. 2. If both current assets and current liabilities were increased by $5,000, would the current ratio increase, decrease, or stay the same? 3. Is Math Revealed more or less solvent than a similar operation with a 25% debt to assets ratio? 4. By how much would you expect the gross profit from product sales to increase (in dollars) if income from product sales increased by $2,000? (Round to the nearest whole dollar amount.) 5. Which current asset is Math Revealed doing a better job of managing - Accounts Receivable or Inventory? Financial Ratios Liquidity Current Ratio Quick Ratio Working Capital Ratio Activity NOTE: Credit sales for the period totalled $6,528. * A/R Turnover * Inventory Turnover Days in AIR Days in Inventory Solvency Debt to Assets Debt to Equity Profitability Calculate the gross profit on product sales only Gross Profit Margin Net Profit Margin Return on Equity * HINT 1: You're using the operating data (P&L data) for two months. To get an annual rate, you'll need to multiply the appropriate P&L amounts by six (6). HINT 2: Since this is the first year of operations, go ahead and use the ending (2/28) balances for asset accounts instead of averages. Balance Sheet As of February 29, 2020 Total 3,876.46 3,876.46 3,600.00 3,600.00 52.79 2,592.00 400.00 200.00 0.00 3,244.79 10,721.25 4,731.00 1,129.00 -838.50 5,021.50 ASSETS Current Assets Bank Accounts 100 Checking Total Bank Accounts Accounts Receivable 120 Accounts Receivable Total Accounts Recelvable Other Current Assets 125 Supplies On Hand 130 Inventory Asset 135 Prepaid Insurance 136 Prepald Rent 150 Undeposited funds Total Other Current Assets Total Current Assets Fixed Assets 180 Computer & Office Equipment 185 Furniture & Fixtures 189 Accumulated Depreciation Total Fixed Assets Other Assets 195 Security Deposit Total Other Assets TOTAL ASSETS LIABILITIES AND EQUITY Liabilities Current Liabilities Accounts Payable 200 Accounts Payable Total Accounts Payable Credit Cards 220 Prime Visa Payable Total Credit Cards Other Current Liabilities 221 Accrued Expenses 225 Interest Payable 230 Unearned Revenue Callfomla Department of Tax and Fee Administration Payable Loan Payable Total Other Current Liabilities Total Current Liabilities 400.00 400.00 16,142.75 1,648.43 1,648.43 615.50 615.50 300.00 0.00 0.00 0.00 2,500.00 2,800.00 5,063.93 1,900.00 1,900.00 6,963.93 Long-Term Liabilities 280 Note Payable Total Long-Term Liabilities Total Liabilities Equity 300 Common Stock 345 Partner Distributions 350 Retained Earnings Opening Balance Equity Net Income Total Equity TOTAL LIABILITIES AND EQUITY 500.00 -2,500.00 5,055.00 0.00 6,123.82 9,178.82 16,142.75 Monday, Apr 27, 2020 11:09:24 AM GMT-7 - Accrual Basis Profit and Loss January - February, 2020 Total 6.090.00 3.750.00 1.227.00 -175.00 10,892.00 780.00 -33.00 46.00 793.00 10,099.00 575.00 110.00 28.25 713.25 Income 400 Tutoring Revenue 405 Workshop Revenue 420 Sales of Product Income 490 Sales Discounts Total Income Cost of Goods Sold 500 Cost of Goods Sold 510 Purchase Discounts Inventory Shrinkage Total Cost of Goods Sold Gross Profit Expenses 600 Labor costs 604 Professional Development Expense 605 Contract Labor 608 Staff Relations Total 600 Labor costs 620 Facility Costs 621 Rent expense 625 Utilities expense Total 620 Facility Costs 630 Marketing Costs 631 Advertising expense 632 Other Miscellaneous Service Cost 638 Bad Debts Total 630 Marketing Costs 640 Office and Tutoring Costs 641 Supplies expense 649 Depreciation expense Total 640 Office and Tutoring Costs 650 Taxes, Insurance, and Professional Fees 651 Accounting and consulting fees 653 Insurance expense Total 650 Taxes, Insurance, and Professional Fees 690 Other Costs 692 Gasoline expense 695 Bank service charges 699 Miscellaneous expense Total 690 Other Costs Total Expenses Net Operating Income 400.00 370.43 770.43 80.00 950.00 50.00 1,080.00 130.00 289.50 419.50 600.00 80.00 680.00 63.00 9.00 220.00 292.00 3,955.18 6,143.82 Other Expenses 700 Interest expense Total Other Expenses Net Other Income 20.00 20.00 20.00 6,123.82 Net Income Monday, Apr 27, 2020 11:14:00 AM GMT-7 - Accrual Basis