Insert Table Chart answer. Text Shape Media Comment Problem #2 Analyze the financial statements provided below. Calculate the 2019 financial ratios listed in the table provided. Create the pro-forma statements for year 2020. Calculate the financial ratios from 2020 assuming: 1. EFN is financed with current liabilities 2. EFN is financed with long-term liabilities 3. EFN is financed with common equity Which financing alternative (if any) does the best job of improving the firm's financial ratios (or not degrading them too much)? Special notes: Sales in 2020 are estimated to be $650,000. When forecasting the pro-forma assume: (1) cost of goods sold, $30,000 of the operating expenses, and depreciation expense are variable; (2) the remainder of operating expenses is fixed; (3) cash, accounts receivable, inventories, net plant, accounts payable, and accrued payables are spontaneous; (4) marketable securities, bonds payable, and common stock are discretionary; (5) $10,000 of bonds payable are current and will be repaid at the beginning of the year; and (6) the firm will maintain its 2019 dividend payout ratio in 2020. Income Statement Page 1 of 2 D View 125% Zoom + Add Page T Insert .. Chart T Text BY Media Comment Table Shape For the year ending December 31, 2019 Sales $500,000 - Cost of goods sold 350,000 Gross profit 150,000 - Operating expenses $75,000 - Depreciation 20,000 EBIT - Interest expense 95.000 55,000 20,000 EBT 35,000 12.250 22.750 - Tax Expense EAT S - Dividends Addition to retained earnings 10,000 $12.750 Balance Sheet December 31, 2019 Cash Marketable securities Accounts receivable Inventories Plant, net TOTAL ASSETS $ 25,000 10,000 50,000 85,000 200.000 S370.000 Accounts payable Accrued payables Bonds payable Common stock Retained earnings Total L E 60,000 35,000 140,000 105,000 30.000 $370.000 Insert Table Chart answer. Text Shape Media Comment Problem #2 Analyze the financial statements provided below. Calculate the 2019 financial ratios listed in the table provided. Create the pro-forma statements for year 2020. Calculate the financial ratios from 2020 assuming: 1. EFN is financed with current liabilities 2. EFN is financed with long-term liabilities 3. EFN is financed with common equity Which financing alternative (if any) does the best job of improving the firm's financial ratios (or not degrading them too much)? Special notes: Sales in 2020 are estimated to be $650,000. When forecasting the pro-forma assume: (1) cost of goods sold, $30,000 of the operating expenses, and depreciation expense are variable; (2) the remainder of operating expenses is fixed; (3) cash, accounts receivable, inventories, net plant, accounts payable, and accrued payables are spontaneous; (4) marketable securities, bonds payable, and common stock are discretionary; (5) $10,000 of bonds payable are current and will be repaid at the beginning of the year; and (6) the firm will maintain its 2019 dividend payout ratio in 2020. Income Statement Page 1 of 2 D View 125% Zoom + Add Page T Insert .. Chart T Text BY Media Comment Table Shape For the year ending December 31, 2019 Sales $500,000 - Cost of goods sold 350,000 Gross profit 150,000 - Operating expenses $75,000 - Depreciation 20,000 EBIT - Interest expense 95.000 55,000 20,000 EBT 35,000 12.250 22.750 - Tax Expense EAT S - Dividends Addition to retained earnings 10,000 $12.750 Balance Sheet December 31, 2019 Cash Marketable securities Accounts receivable Inventories Plant, net TOTAL ASSETS $ 25,000 10,000 50,000 85,000 200.000 S370.000 Accounts payable Accrued payables Bonds payable Common stock Retained earnings Total L E 60,000 35,000 140,000 105,000 30.000 $370.000