Question 4 (Financial Planning and Ratio Analysis) 25 Marks Consider the following simplified Financial Statement Income statement $32,000 Sales Cost of sales Net Income 24,400 7,600 Balance Sheet $500 Cash Accounts Receivables 2,000 Inventory 5,000 Net Fixed Assets 7,500 Total Assets 15,000 Accounts payables $1,000 Long term debt 2,000 Equity 12,000 Total Liabilities and Equities 15,000 Required: Balance Sheet Cash Accounts Receivables 2,000 Inventory 5,000 Net Fixed Assets 7,500 Total Assets 15,000 $500 Accounts payables $1,000 Long term debt 2,000 Equity 12,000 Total Liabilities and Equities 15,000 Required: 1) Create a proforma Income statement (Assume a 10% growth rate) 2) Create a proforma Balance Sheet (Assume a 10% growth rate for assets and liabilities) 3) Calculate the following Ratios from the simplified financial statements above): a) Profit Margin b) Return on Assets c) Return on Equity d) Current Ratio e) Quick Ratio