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Please answer the 2 questions using the information provided.

1. Using the ratios provided by the accountant, evaluate Dans business, and make suggestions for improvements.

2. Using the financial information provided, calculate a break-even point and rate of return for the new expansion. What additional information would Dan need to do a payback analysis of the proposed expansion.

TABLE 9A $ 145,000 $192.900 $ 47.900) The Ladder Rail Income Statement: Year 1 Sales 4500 $30 $135.000 250 @ $40 10.000 Cost of Goods Sold 4750 a $12 57.000 Wages 80,000 Employee Benefits 6,000 Utilities 17,000 Repairs & Maintenance 4,500 Insurance 1,000 Amortization 17,000 Interest and bank charges _10400 Net Income The Ladder Rail Income Statement: End of Year 1 Assets Cash $ 2,250 Accounts Receivable 3,800 Inventory 10,250 Building & Equipment 153,000 Land 50.000 Total Assets $219,300 Liabilities & Owner's Equity Accounts Payable $ 36,800 Bank Loan-Current Payable 23,400 Bank Loan-Long Term 117,000 Owner's Equity 42.100 Total Liabilities & Owner's Equity $219.300 TABLE 9B Selected Ratios for Metal Fabricating Companies Current Ratio Gross Margin Profit on Sales Profit on Net Worth Collection Period Inventory Turnover Debt to Equity 1.52:1 23.2% 6.1% 21.1396 59 days 4.2 1.1:1 TABLE 9A $ 145,000 $192.900 $ 47.900) The Ladder Rail Income Statement: Year 1 Sales 4500 $30 $135.000 250 @ $40 10.000 Cost of Goods Sold 4750 a $12 57.000 Wages 80,000 Employee Benefits 6,000 Utilities 17,000 Repairs & Maintenance 4,500 Insurance 1,000 Amortization 17,000 Interest and bank charges _10400 Net Income The Ladder Rail Income Statement: End of Year 1 Assets Cash $ 2,250 Accounts Receivable 3,800 Inventory 10,250 Building & Equipment 153,000 Land 50.000 Total Assets $219,300 Liabilities & Owner's Equity Accounts Payable $ 36,800 Bank Loan-Current Payable 23,400 Bank Loan-Long Term 117,000 Owner's Equity 42.100 Total Liabilities & Owner's Equity $219.300 TABLE 9B Selected Ratios for Metal Fabricating Companies Current Ratio Gross Margin Profit on Sales Profit on Net Worth Collection Period Inventory Turnover Debt to Equity 1.52:1 23.2% 6.1% 21.1396 59 days 4.2 1.1:1

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