Income statement 2001

Sales	1200
Operating Costs	1020
EBITDA	180
Depreciation	30
EBIT	150
Interest	21.7
EBT	128.3
Taxes (40%)	51.3
Net Income	77.0

Balance sheet

	2000	2001
Cash	12	10
AP	108	90
AR	180	150
NP	67	51.5
INV	180	200
Accruals	72	60
Net PPE	300	250
LTD	150	150
Stock	50	50
RE	225	208.5
Total assets	672	610

Compute and analyze 2001 identity cash flow statements. What are the key strengths and weaknesses? you have to compute a reconciliation of retained earnings in order to calculate dividends. In your answer, evaluate the firm's capital budgeting, working capital and capital structure decisions. Then compute the leverage ratios. Is this firm at risk of default? If so, explain why.