Gishma and Gyan want to use financial planning models to prepare a projected $($pro forma$)$ financial statement to determine the profitability and financial health of the business for the next four

years if they go public. The income statement ending Dec $31,2023,$ and the company's balance sheet as of Dec $31,2023,$ are shown below. Use the financial statement to answer the following

questions:

INCOME STATEMENT

$*$Dividend is $$60m$

$*$Retained earnings is $$38m$

BALANCE SHEET

Assets:

Liabilities and Equities:

$5.$ What was the company$$s profit for $2023?$

$6.$ Compute the following three profitability ratios and explain to Gishma and Gyan whether the business did better or worse in $2023$ relative to the performance of the industry.

i$.$ Profit margin

ii$.$ Return on assets

iii. Return on equity, and

iv$).$ Also, calculate and explain operating cash flow.

The profitability ratios for the industry in $2023$ are as follows:

Industry ratios

Profit margin

$7\mathrm{.}07\%$

Return on assets

$60\mathrm{.}00\%$

Return on equity

$42\mathrm{.}50\%$

Current ratio $3$ times

Total debt ratio $60\mathrm{.}0\%$

According to financial analysts, the industry performed better than expected despite the covid$-19$ pandemic.

$7.$ The business$$ current assets comprise of cash and other current assets whilst its current liabilities comprise only of accounts payable. Compute and explain the current ratio and total debt ratio for the business in $2023.$

$8.$ Gishma believes that if the business goes public a large amount of capital can be raised to expand the business to maximize the value of the firm. Assuming the business projects a $32\%$ increase in operating revenue $($sales$)$ per year, what will be the anticipated operating revenue in three years from now $($i$.$e$.,$ in $2026)?$

$9.$ If net income is projected to increase by $30\%$ per year, what will be the net income in $2026?$

$10.$ What are the earnings per share $($EPS$)$ and dividend per share $($DPS$)$ in $2023$ if $10$ million shares are issued?