Using the Balance Sheet of Al Salam Firm for the years of 2017. Required:

• Using Common Size Balance Sheet Method, Conduct Solvency Analysis of the Capital Structure Composition of the Liabilities and Equity for the years 2017.

• Comment on the Capital Structure for the years 2017.

• Comment of the highest and lowest components of the Capital Structure Composition for the year 2017.

2017 Ratios 2018 Ratios No 1. Comments Ratio Current Ratio 2. Quick Ratio 3. Cash Ratio Other Information for Year of 2017: Stock Market Price $ 5.50 Number of Shares Outstanding 1000 Earning Growth Rate 25% Other Information for Year of 2018: Stock Market Price $ 7.00 Number of Shares Outstanding 1000 Earning Growth Rate 10% Al Salam Firm Income Statement 2018 $30 Balance Sheet Assets Cash Accounts receivable Inventory Current assets Gross PPE Accumulated depreciation Total Assets 590 $120 $240 $1,200 $570 $870 2017 $15 $45 590 $150 $900 Sales Cost of goods 50 Gross profit SG&A EBITDA Depreciation EBIT Interest expens: Pre-tax earning Taxes (30%) Net Income $420 2018 $900 $360 $540 $105 $435 $150 $285 $45 $240 $72 $168 2017 $750 $300 $450 590 $360 $120 $240 $30 $210 $630 2018 2017 $63 $147 Liabilities Accounts payable Short-term debt Current liabilities Long term debt Common stock Retained earnings Total liabilities and Equity $60 $60 $120 $342 $150 $258 $870 $60 $30 $90 $300 $150 $90 $630