Venture Coast LLC is looking to acquire a new company. Below are the financials for a potential

candidate. Find out and determine if Venture Coast should invest. Revenue forecast is as follows: Y$1$: $$600,000$; Y$2$: $$625,000$; Y$3$: $$550,000.$

decide if Venture Coast should acquire or not acquire ABC company? Yes$/$No$,$ Why?

Income Statement

For the year ending December $31,2017$

Sales $$500,000$

Cost of goods sold $350,000$

Gross profit $150,000$

Operating expenses $$75,000$

Depreciation $20,000$

EBIT $55,000$

Interest expense $20,000$

EBT $35,000$

Tax Expense $12,250$

EAT $$22,750$

Dividends $10,000$

Retained earnings $$12,750$

Balance Sheet

December $31,2017$

Cash $ $25,000$ Short$-$term liabilities $60,000$

Marketable securities $10,000$ Mid$-$term liabilities $35,000$

Accounts receivable $50,000$ Long$-$term liabilities $140,000$

Inventories $85,000$ Common Equity $135,000$

Plant, net $200,000\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_$

TOTAL ASSETS $$370,000$ Total L $+$ E $$370,000$