Zeta Corporation

Scenario: Comparative Financial Statement Analysis

Data:

• 2023:
  • Revenue: $500,000
  • Expenses:
    • Cost of Goods Sold: $250,000
    • Operating Expenses: $100,000
• Assets:
  • Cash: $50,000
  • Accounts Receivable: $60,000
  • Equipment: $150,000

• Liabilities:
  • Accounts Payable: $40,000
  • Long-term Debt: $100,000

• 2022:
  • Revenue: $450,000
  • Expenses:
    • Cost of Goods Sold: $230,000
    • Operating Expenses: $90,000
• Assets:
  • Cash: $40,000
  • Accounts Receivable: $50,000
  • Equipment: $130,000

• Liabilities:
  • Accounts Payable: $35,000
  • Long-term Debt: $80,000

Requirements:

1. Prepare a comparative income statement and balance sheet for 2022 and 2023.
2. Analyze the changes in financial performance and position between the two years.
3. Discuss the implications of these changes for the company’s strategy.