Greasy Spoon Restaurant - Case 1 Greasy Spoon Restaurant Balance Sheet ASSETS 2017 2016 Cash Marketable Securities Accts. Rec. Inventories Total Current Assets $12,000 66,000 152,000 191,000 $421.000 $31,000 82,000 104,000 145,000 $362,000 Gross Fixed Assets Less: Accumulated Depreciation Net Fixed Assets $195,000 63,000 $132,000 $180,000 52,000 $128,000 Total Assets $553,000 $490,000 Liabilities and Equity A/P Notes Payable Accruals Total Current Liabilities $136,000 200,000 27,000 $363,000 $126,000 190,000 25,000 $341,000 Long Term debt 38,000 40,000 $381,000 Total Liabilities $401,000 Equity Common Stock (100,000 shares $.20 par) Paid in capital in excess of par Retained earnings Total Equity $ 20,000 30,000 102,000 $152,000 $553,000 $ 20,000 30,000 59,000 $109,000 Total Liabilities and Equity $490,000 Greasy Spoon Income Statement 2017 $1,550,000 1,030,000 $ 520,000 Revenue Less: Cost of goods sold Gross Profit Less: Operating Expenses Selling Expense $150,000 G and A Expense 270,000 Depreciation Exp 11,000 Total Operating expenses Operating Profits Less: Interest expense $ 431,000 89,000 29,000 Profit before tax Less: taxes (20%) $ 60,000 12,000 Net Profit After taxes $ 48,000 Greasy Spoon Statement of Retained earnings 2017 Retained earnings balance (1/1/2017) Plus: Net income Less: Dividends $ 59,000 48,000 5,000 Retained earnings (12/31/17) $ 102,000 Greasy Spoon Restaurant Table 1 Profits, dividends, and retained earnings, 2011-2017 Dividends Paid Contribution to retained earnings Year Net Profit $ 0 ($50,000) 2011 ($50,000) (20,000) (20,000) 15,000 35,000 2012 2013 2014 2015 2016 2017 40,000 1,000 15,000 35,000 39,000 40,000 43,000 3,000 43,000 48,000 5,000 2016 Additional information needed to calculate the ratios Revenue Cost of goods sold $1,400,000 1,000,000 Questions 1. Prepare a cash flow statement for 2017. 2. Calculate the following ratios for 2016 and 2017: Current ratio, ROA and ROE using the DuPont models, inventory turnover, and earnings per share. 3. Compare the results in a narrative - simply state whether the company is doing better or worse in these areas and describe why that is the case