You are an accountant and have two clients you’ll be dealing with during this assignment. JumpinJehosaPhats is a haberdashery (Google it!), and is owned by J.J. Phats. JJ is expanding the company and is in need of advice. He has come to you to discuss the future of the company. Part 1 – Incorporating (20% of grade) Discuss in detail the requirements of incorporating the business, the advantages and disadvantages, and provide JJ with recommendations. PART II (60%) Financial Statement Analysis provides information that indicates how a company is performing. By comparing financial statements of different years, a manager can make informed decisions about investments, expenditures, and activities that impact revenues. Directions: Read the chapter in the text titled “Financial Statement Analysis.” Using the comparative financial statements for Baby Cakes International Inc. (see “BabyCakes_Financial_Project_Data.xls” linked in the lesson activities) , complete the following tasks. Note: The market price of BabyCakes Int’l, Inc. common stock was $20 on December 31, 2008. Part A: Complete the 19 ratios listed below. Determine the following measures for 2008: 1. Working Capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days’ sales in receivables 6. Inventory turnover 7. A number of days’ sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders’ equity 10. Number of times interest charges earned 11. A number of times preferred dividends earned 12. Ratio of net sales to assets 13. Rate earned on total assets 14. Rate earned on stockholders’ equity 15. Rate earned on common stockholder’s equity 16. Earnings per share on common stock 17. Price-earnings ratio 18. Dividends per share of common stock 19. Dividend yield Part B: Explain what the results of each ratio indicate about the company. Part C: Complete a horizontal analysis for the Income Statement, and explain your findings. Part D: Complete a vertical analysis for the Income Statement, and explain your findings. Part III (20%) Cash Flow Your second client, Bailey’s Chocolates, is asking you to produce a Cash flow from Operating Activities. Using the Indirect Method and the information provided, calculate the cash flow from Operating Activities.