Instructions Part One: The Excel file titled Lone Star Analysis Sheets contains financial information for 2021 and 2020. 1. Prepare a Comparative Balance Sheet with vertical analysis (required columns added). Tab 1 attached at the end 2. Prepare a Comparative Income Statement with horizontal analysis (required columns added). Tab 2 '' 3. Based on the financial information given: calculate the following 2021 ratios for the company (formulas are shown, but you are to show calculations and answers) Tab 3. To aid in your analysis the Smart Phone covers industry ratios are provided as a comparison resource. Depending on your Case (A, B or C) assume the industry ratios below.

			Industry Ratio
		A	B	C
a	Current ratio	1.75	4.50	3.40
b	Quick ratio	1.50	3.40	2.60
c	Accounts Receivable Turnover	8.30	12.50	7.90
d	Inventory TurnOver	12.00	8.20	14.00
e.	Number of Days Sales in Inventory	30.00	39.00	26.00
f.	Debt to equity taio	.45	.25	.72
g.	Rate earned on Total Assets.	32.60%	56%	42.30%
h	Rate earned on Stockholders equity.	44.30%	48.60%	62.40%
i.	Earnings per Share (adds shares sold on Jan1 , 2021	$1.33	$1.53	$2.08
j.	Profit Margin Ratio.	15.30%	21.50%	24.00%

4. Calculate the expected 2022 Income from operations break-even point and for a target profit of $600,000 (calculate units and dollars of sales) Tab 3. Round to the nearest unit and dollar. For purposes of calculating the break-even point and target profit use the information below: (only use your Case A, B or C info.

	a	b	c
unit sales price	$16.00	$20.00	$32.00
Unit Variable Cost	$10.40	$13.00	$20.80
Fixed Cost - use $130,000 for all

Part Two: Write Memo (use Word) As the new accounting advisor to Lone Star, prepare a written Memo to the CEO in which you comment on the financial health and performance of the company based on your analysis in the Excel file Tab 1, Tab 2 and Tab 3. Identify at least two strengths and two weaknesses in the company. Also, Make at least two recommendations/comments that would be helpful to the CEO. Be specific in each of your recommendations. Comments should be based on your vertical and horizontal analysis as well as your break-even and target profit analysis. The memo length should be no more than two pages double spaced, font 12.

Tab 1 Tab 2 calculution Acel Answert