Year One Year Two

Current Assets
Cash 196,000 482,000
Accounts receivable 330,000 616,000
Inventory 572,000 720,000
Prepaid expenses 84,000 70,000
Total Current Assets 1,182,000 1,888,000
Property, Plant and Equipment
Furniture and fixtures 896,000 952,000
Accumulate depreciation 224,000 430,000
Net book value 672,000 522,000
TOTAL ASSETS 1,854,000 2,410,000

Year one Year Two

Current Liabilities
Accounts Payable 168,000 310,000
Income Tax Payable 27,000 47,000
Notes Payable 160,000 300,000
Accrued Expenses 64,000 82,000
Total Current Liabilities 419,000 739,000
Long-term Notes Payable, at 10% 100,000 200,000
Stockholder's Equity
Paid-in Capital 1,200,00 1,200,000
Retained Earnigs 135,000 271,000
Total 1,335,000 1,471,000
Total Liabilities and Stockholder's Equity 1,854,000 2,410,000
 Year one
Sales Revenue 3,432,000
Costs of Goods Sold 2,288,000
Gross Profit 1,144,000
Operating expenses 624,000 728,000
Depreciation expenses 224,000 848,000 206,000
Earnings before Interest and taxes 296,000
Interest expense 26,000
Earnings before taxes 270,000
Income taxes 135,000
Net income 135,000

I. Liquidity Ratio
Current Ratio 2.55
Quick Ratio 1887999
Cash Ratio 0.65
Net working capital to Total Asset Ratio 1887999.7

II. Solvency Ratio

Debt Ratio 939,000 0.39
Equity Ratio 0.61
Debt to Equity Ratio 0.64
Times Interest Earned Ratio 10.44
Cash Coverage Ratio 29.12

III. Activity Ratio

A. Turnovers
Asset Turnover Ratio 1.19
AR Turnover 7.17
Inventory Turnover 3.35
Accounts Payable Turnover 10.12

B. Periods
AR Period 50.19
Inventory Period 107.54
AP Period 35.58

C. Cycle
Normal Operating Cycle 157.73
Cash Conversion Cycle 122.15
Year Two
4,576,000
3,120,000
1,456,000

934,000
522,000
50,000
472,000
236,000
236,000