Wang and Sanjay want to use financial planning models to project (pro forma) financial statement to determine the profitability and financial health of the business for the next four years if they go public. The income statement ending Dec 31, 2022, and the company's balance sheet as of Dec 31, 2022, are shown below. Use the financial statement to answer the following questions:

INCOME STATEMENT	($millions)
Total operating revenues	1,262
Less expenses	1,042
Less depreciation	90
Earnings before interest and taxes	130
Less interest	19
Net income before taxes	111
Less taxes @ 11.71%	13
Net income	98
BALANCE SHEET
Assets:
Cash	25
Other current assets	88
Net Fixed Assets	30
Total Assets	143
Liabilities and Equities:
Accounts payable	35
Long-term debt	48
Stockholders' Equity	60
Total Liabilities & Equities	143

5. What was the company's profit for 2022?

6. Compute the following three profitability ratios and explain to Wang and Sanjay whether the business did better or worse in 2022 relative to the performance of the industry.

i. Profit margin

ii. Return on assets

iii. Return on equity, and

iv).Calculate and explain operating cash flow.

The profitability ratios for the industry in 2022 are as follows:

Industry ratios
Profit margin	7.07%
Return on assets	60.00%
Return on equity	42.50%

Current ratio 3 times

Total debt ratio 60.0%

Despite the covid-19 pandemic, the industry performed better than expected by the industry analysts.

7. The business' current assets comprise of cash and other current assets whilst its current liabilities comprise only of accounts payable. Compute and explain thecurrent ratioandtotal debt ratiofor the business in 2022.

8. Wang believes that if the business goes public large capital can be raised to increase sales and cash flows to maximize the value of the firm. Assuming the business projects a 35% increase in operating revenue(sales) per year, what will be the anticipated operating revenue in three years from now (i.e., in 2025)?

9. If net income is projected to increase by 30% per year, what will be the profit marginin 2025?

10. What will be the estimated earnings per share(EPS) in 2025 if 10 million shares are issued?