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  The financial manager of Company LMN is reviewing the company's financial statements for the quarter ended June 30th, 20XX. From the income statement, it is observed that the company generated $700,000 in revenue and incurred $500,000 in expenses, resulting in a net income of $200,000. Additionally, the balance sheet shows total assets of $3,000,000, total liabilities of $1,200,000, and total stockholders' equity of $1,800,000.

  Requirements:

  • Compute the gross profit margin and net profit margin for Company LMN.
  • Assess the liquidity position by calculating the current ratio and quick ratio.
  • Analyze the return on equity (ROE) for Company LMN.
  • Provide recommendations for improving profitability and financial stability based on the analysis.