You will have an opportunity to apply your understanding of ratio analysis to a small company seeking equity financing on Dragons' Den, a Canadian TV show. The video presentation by Nuba Tisane is available at: https://www.cbc.ca/dragonsden/pitches/nuba In the Dragon's Den episode featuring a pitch by Nuba Tisane, Vincenzo Guzzo decides to invest in the company, while Wes Hall and Arlene Dickenson also offer an equity investment, but on different terms than those stipulated by the founder.

A 2 page memo in which you take a position supporting either Vincenzo or Wes and Arlene's assessment of the company as an equity investment opportunity.

In your answer, ensure that you address the questions below.

1. How much do the founders think their business is worth?

2. How much equity investment is the founders asking for?

3. What do the founders intend to do with the investment?

4. How much are the company's projected revenues (sales)

5. How much is the gross profit margin?

6. How much did the founders initially invest in the start-up

7. How much of an investment do Wes and Arlene agree to make? On what terms? What will their return on equity be if his offer is accepted? How does their RoE compare to the RoE based on the original terms?

8. What other qualitative information is presented in the video that is significant to your assessment?

An income statement in good form for the company based on the information given in the video and the following assumptions:

- Other operating costs of $50,000

- Assume a tax rate of 15%.

- Assume no debt.