Question
The following data based on assumption for 2 years projection, Analysis the following income statement and state whether investor should invest the company or not
The following data based on assumption for 2 years projection, Analysis the following income statement and state whether investor should invest the company or not (250 words minimum)
| YEAR 1 | YEAR 2 |
Revenues | $ 2,995,000 | $ 3,200,000 |
Cost of sales | 1,894,000 | 2,100,000 |
Gross profit | $ 1,101,000 | $ 1,100,000 |
|
|
|
Accounting | 8,000 | 8,300 |
Advertising and promotion | 17,000 | 11,000 |
Bank chargers | 51,000 | 55,897 |
Compensation and benefits | 197,546 | 234,985 |
Insurance | 5,000 | 5,550 |
Lease, facilities | 350,600 | 456,000 |
Legal and professional | 15,900 | 15,900 |
Licenses and fees | 10,000 | 10,000 |
maintenance | 17,000 | 18,700 |
Miscellaneous | 12,567 | 13,400 |
Security | 500 | 500 |
Utilities | 25,700 | 28,700 |
Website | 2,000 | 2,000 |
Total operating expenses | $ 712,813 | $ 860932 |
|
|
|
EBIDTA | 388,187 | 239,068 |
Depreciation | (7,893) | (7,893) |
Operating profit | 380,294 | 231,175 |
Interest expense | (41,890) | (42,890) |
Earnings before taxes | 338,404 | 188,285 |
Income taxes | (18,567) | (19,879) |
Net Income | 319,837 | 168,406 |
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