4. Construct a common size balance sheets for 2019 and 2020. Comment on any changes in the percentages of assets and liabilities.

Construct a common size income statement 2019 and 2020. Comment on any of the changes in the composition of the income statement.

4. Use the DuPont equation to decompose return on equity for 2020.

Balance Sheet

Assets	2019		2020
Cash	$14,000		$9,282
Short-term investments.	48,600		18,000
Accounts receivable	351,200		632,160
Inventories	710,200		1,287,360
Total current assets	$1,124,000		$1,946,802
Gross fixed assets	491,000		1,202,950
Less: accumulated depreciation	146,200		263,160
Net fixed assets	$344,800		$939,790
Total assets	$1,468,800		$2,886,592
Liabilities and equity	2019		2020
Accounts payable	$145,600		$324,000
Notes payable	200,000		720,000
Accruals	136,000		284,960
Total current liabilities	$481,600		$1,328,960
Long-term debt	323,432		1,000,000
Common stock (100,000 shares)	460,000		460,000
Retained earnings	203,768		97,632
Total equity	$663,768		$557,632
Total liabilities and equity	$1,468,800		$2,886,592

		Income Statement
	2019		2020
Sales	$5,432,000		$6,834,400
Cost of goods sold	2,864,000		4,200,000
Other expenses	340,000		720,000
Depreciation	18,900		116,960
Total operating costs	$3,222,900		$5,036,960
EBIT	$2,209,100		$1,797,440
Interest expense	62,500		176,000
Pretax earnings	$2,146,600		$1,621,440
Taxes (40%)	858,640		648,576
Net income	$1,287,960		$972,864

4. Net working capital
5. Inventory turnover
6. Receivables turnover
7. Total asset turnover
8. Debt/Equity ratio
9. Net profit margin
10. Return on assets
11. Return on equity
12. Current ratio
13. Quick ratio
14. Compute the following using the data from 2020 except where noted: