Income Statement
Revenues: 28,000
Less: Operating Expenses
Rent Expense 1,200
Salaries Expense 4,500
Utilities Expense 300
Insurance Expense 100
Supplies Expense 400
Depreciation Expense 500
7,000
7,000
21,000
Balance Sheet
Assets:
Cash 101,800
Accounts Receivable 20,000
PP In 1,100
Supplies 2,600
Equipment 55,000
Accumulated Depreciation (500)
Total Assets 180,000
Liabilities and Stockholders’ Equity
Liabilities:
Accounts Payable 8,000
Salaries Payable 3,000
Total Liabilities 11,000
Stockholders’ Equity:
Common Stock 150,000
Retained Earnings 19,000
Total Stockholders’ Equity 169,000
Total Liabilities and Stockholders’ Equity 180,000
• Perform 2 different types of ratio analysis.
• Which type of ratio is best suited for an outside potential investor?
• Show the equations for each of your ratios, and explain why you chose them.
