Mandrake Motorcycles was started 3 years ago. The company manufavtures and sells classic mototcycles similiar to Harley Davidson and Indians made in the 1940's. They have provided financial information for the last 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 in the state. Acceptance of the offer would require Monk to open a desicated showroom and repair facility and stock Mandrake parts. 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 ratios.

Required: 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? Show your calculations.

  

 

Mandrake Motor Cycles Balance Sheets Assets Current assets Cash and cash equivalents Accounts receivable Inventory Other current assets Total current assets Property, plant and equipment, net Total assets Liabilities and stockholders' equity Current liabilities Accounts payable Short-term debt payable Other current liabilities Total current liabilities Long-term debt Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity December 31, December 31, 2020 2019 $ 208,579 $ 399,339 $ (190,760) 157,450 162,618 785,657 568,880 175,864 187,982 1,327,550 1,318,819 968,547 1,099,544 $ 2.296,097 $ 2,418,363 $ (122.266) $ 243,785 341,680 255,642 841,107 107,579 948,686 1,250,000 97,411 1,347,411 $ 2.296.097 $ 189,911 293,553 252,971 736,435 355,000 1,091,435 1,250,000 76.928 1,326,928 Change $2.418.363 (5,168) 216,777 (12,118) 8,731 53,874 48,127 2,671 (130,997) -11.91% -5.1% 104,672 (247,421) (142,749) 20,483 20,483 Percent Change (122.266) -47.8% -3.2% 38.1% -6.4% 0.7% 28.4% 16.4% 1.1% 14.2% -69.7% -13.1% 0.0% 26.6% 1.5% -5.1%