Mandrake Motorcycles was started 3 years ago. The company manufactures and sells classic motorcycles similar to Harley Davidsons and Indians made in the 1940's. They have provided financial information for the past two years. Marty Monk" Fisher owns the largest motorcycle dealership in north Florida. Recently, he was approached by Bob Sherman, founder of Mandrake Motorcycles, and offered the opportunity to be the sole distributor of Mandrake cycles in the state. Acceptance of the offer would require Monk to open a dedicated showroom and repair facility and stock Mandrake parts. Monk is quite impressed by the Mandrake product but, before making a major investment, he wants to be confident the company will be around for the long haul." Analyze the following financial statements, including some relevant financial ratios. Based on your analysis, comment on the matters that Monk should probe in an upcoming meeting with Bob Sherman of Mandrake. Do you think Monk should open a Mandrake showroom? Why or why not? Mandrake Motor Cycles December 31, December 31, Percent Balance Sheets 2020 2019 Change Change Assets Current assets Cash and cash equivalents S 208.579 399,339 $ (190.760) -47.8% Accounts receivable 157,450 162.618 (5.168) -3.2% Inventory 785,657 568.880 216,777 38.19 Other current assets 175.864 187.982 (12,118) -6.4% Total current assets 1,327,550 1,318,819 8,731 0.7% Property, plant and equipment, net 968.547 1,099.544 (130.997) -11.91% Total assets $ 2.296,097 $ 2.418.363 $(122.266) -5.1% Liabilities and stockholders' equity Current liabilities Accounts payable $ 243.785 S 189,911 53,874 28.4% Short-term debt payable 341,680 293,553 48,127 16.4% Other current liabilities 255.642 252.971 2.671 1.1% Total current liabilities 841.107 736,435 104,672 14.2% Long-term debt 107.579 355.000 (247,421) -69.7% Total liabilities 948,686 1,091,435 (142,749) - 13.1% Stockholders' equity Common stock Retained earnings Total stockholders' equity 1.250,000 97,411 1.347.411 1.250.000 76.928 1.326.928 20.483 20.483 0.0% 26.6% 1.5% Total liabilities and stockholders' equity -5.1% (122.266) $ 2.296,097 $ 2.418.363 Mandrake Motor Cycles Income Statements Year Ended Year Ended December 31, December 31, 2020 2019 $ 1.476,941 912.386 564.555 $ 1.576,941 1.103.859 473,082 $ (100,000) $ (191,473) $ 91.473 -6.3% - 17.3% 19.3% 295,388 201,564 $ 93.824 46.5% Net sales Cost of goods sold Gross margin Operating expenses: Selling expenses General and administrative expenses Total operating expenses Operating income Interest expense Income before taxes Income taxes Net income 192,002 487.390 77,165 45.652 31.513 11.030 20.483 185.460 387,024 86,058 70.248 15,810 5.534 10.276 $ $ $ $ $ $ $ 6,542 100.366 (8,893) (24.596) 15.703 5.496 10.207 3.5% 25.9% -10.3% -35.0% 99.3% 99.3% 99.3% S