1. Epsilon Retail

Scenario: Financial Ratios Analysis

Data: Epsilon Retail reported the following financial information for the year 2023:

• Current Assets: $500,000
• Current Liabilities: $200,000
• Inventory: $100,000
• Total Assets: $1,000,000
• Total Liabilities: $400,000
• Equity: $600,000
• Sales Revenue: $2,000,000
• Net Income: $300,000

Requirements: Calculate Epsilon Retail's current ratio, quick ratio, inventory turnover ratio, and return on equity (ROE). Analyze each ratio and discuss its implications for Epsilon Retail's liquidity, inventory management, and profitability. Evaluate Epsilon Retail's financial performance based on the ratios calculated. Recommend strategies for Epsilon Retail to improve liquidity management and financial efficiency.