Ray & Ronald

Income Statement

For the Year Ending 12/31/2013

Sales Revenue		100,000
Less Cost of Goods Sold		-60,000
Equals Gross Margin		40,000
Operating Expenses
Selling and Administration	15,000
Depreciation	7,000
Total Operating Expense		-22,000
Operating Income		18,000
Tax		-7,200
Net Income		10,800

Ray & Ronald

Statement of Retained Earnings

For the Year Ending 12/31/2013

Beginning Balance		10,000
Net Income		10,800
Less Dividends		-3,400
Ending Balance		17,400

Ray & Ronald

Balance Sheet

12/31/2012 & 12/31/2013

Category	2012	2013
Cash	20,000	25,000
Accounts Receivable	15,000	12,000
Inventory	30,000	52,000
Total Current Assets	65,000	89,000
Equipment	70,000	65,000
Less Accumulated Depreciation	-15,000	-19,000
Equipment (Net)	55,000	46,000
Total Assets	120,000	135,000
Accounts Payable	15,000	29,000
Long-term Liabilities	25,000	18,600
Total Liabilities	40,000	47,600
Common Stock	70,000	70,000
Retained Earnings	10,000	17,400
Total Equity	80,000	87,400
Total Liabilities & Equity	120,000	135,000

Shares of Stock Outstanding	2,000	2,000
Market Price per Share Common Stock	7	8

A) Use the financial information from Ray and Ronald Company to develop a cash flow statement for 2013.

B) Use the financial information from Ray and Ronald Company to compute any three activity ratios, any one liquidity ratio, any one debt ratio, any three profitability ratios, and any two market ratios.