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Q2: MARNI COMPANY Balance Sheet As of December 31 ASSETS Cash $ 50,000 Accounts receivable 100,000 Inventory 200,000 Net plant and equipment 650,000 Total assets

Q2: MARNI COMPANY Balance Sheet As of December 31 ASSETS Cash $ 50,000 Accounts receivable 100,000 Inventory 200,000 Net plant and equipment 650,000 Total assets $ 1,000,000 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 100,000 Accrued expenses 90,000 Long-term debt 250,000 Common stock 100,000 Paid-in capital 50,000 Retained earnings 410,000 Total liabilities and stockholders' equity $ 1,000,000 MARNI COMPANY Income Statement For the year ended December 31 Sales (all on credit) $ 2,000,000 Cost of goods sold 1,750,000 Gross profit $ 250,000 Sales and administrative expenses 30,000 Fixed lease expenses 10,000 Depreciation 60,000 Operating profit $ 150,000 Interest expense 25,000 Profit before taxes $ 125,000 Taxes (40%) 50,000 Net income $ 75,000 Required: 1) Calculate OCF and FCF 2) Calculate the debt ratio 3) Calculate the Time interest earned 4) Calculate the Liquidity ratio

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