Table 5.3 Sample Balance Sheet LCG Innovations Inc. Balance Skaat as of Table 5.4 Sample Income Statement LCG Irnovations Inc Income Stztement For the Year Jamuary I through December 31, 2019 \begin{tabular}{lr} Gross Revenues & $700,000 \\ Less: allowances for doubtful accounts & 50,000 \\ \hline Ner Revenses & 630,000 \\ Cost of goods sold & 415,000 \\ \hline Gross Profit & 235,000 \end{tabular} Operating expenses Solliber expones \begin{tabular}{lr} \hline Eamings Before Enterests, Twos, Depreciation and Antortizatior & 210,150 \\ Depreciation Expensas & 28,750 \\ \hline Eamings Before Interesta and Taxas & 181.400 \end{tabular} Nonoperating Revenues aud Expenses \begin{tabular}{lr} Interest reverues & 1,800 \\ Interest expenses & 147,000 \\ \hline Total Non-operating Income & 145,200 \end{tabular} \begin{tabular}{lr} \hline Eamings Before Tux & 36,200 \\ Provisions for takes & 14,480 \\ \hline Net Income & 521,720 \\ \hline \hline \end{tabular} FInanolal Ratloc Llaviaity fiadlos Cume-t ratio = Current assets f Current lablities Quldk ratid - (Cument assets - leventacy - prepald expenses) f Cunent llabilties Cash ratio = (Cash + short-term levestments) f Current lablltias Fingnciai Leverage Ratios Tatal deot ratio - Total labilities / Total essets Debt-bo-sq - ity ratio = Total dect i Total equlty Equlty maltpler = Total ssets / Total equty Times Interest earned ratio = Earnings before interests and taxes f Interest expenses Cash coversge retid - Eartings before Interests, taxes, deprecietion and andrization / litterest expenses Turnover Ratlos liventecy burover = Cost of goods sold f Averege inventory Days saies in inventory = 265 days f inventory tumover Recelvebies tumover = Net revenues / Averege acco -is recehebies Averege colection perlod = 255 days / Recelvabies burnover Faysbles burnover = Purchsses f Averge accounts payebie Note: Purcheses = COGg - Ending leventory - Eeginning lnventory Averege peysbie perlod = 365 days / Faysbies tumover Tatal esset tumover - Net revenues / Averege total assets Frofiabily fatios Gross margin = Grass profts i Net revenues Froft margln = Net lncome i Net reven ess Fetum on Assets (FOA)= Net income f Avergpe total essets Retum on Equly (ROE) = Net inceme I Averege equlty