which the In preparation for her meeting with the bank, Susan Burke had concerns about the financial condition of her firm and whether there was a trend in the financial statements that might cause the bank to become wary of Triple A as a continuing customer. For example, Susan wondered whether the firm's inventory level had increased at a rate that was harmful to the firm's liquidity position. It was important to convince the bank that the firm was well run and that all aspects of its operation indicated managerial consistency and skill. TABLE 1 Triple A Office Mart Income Statement (selected years) 1993 1994 1995 1996 Sales $3,800,000 $4,180,000 $4,850,000 $6,000,000 Cost of goods sold (2.460,000) (2,975.000) (3.200.000) (4.180,000) Gross profit $1,340,000 $1,205,000 $1,650,000 $1,820,000 Selling, admin, and depreciation expenses ($684,000) ($820,000) ($898,408) ($1,015,467) (30.780) (30.780) Interest (42,372) (35,313) Profit before tax $625,220 $354,220 $709,220 $769,220 Taxes (187.566) (106.266) (212.766) (230,766) Net income $437,654 $247,954 $496,454 $538,454