## (Solved) Part B (30 points) Income Statement Revenue Cost of goods sold Selling & admin. expenses Interest expense Net Income Balance...

Part B (30 points) Income Statement Revenue Cost of goods sold Selling & admin. expenses Interest expense Net Income Balance Sheet Assets Cash Accounts receivable Inventory Property & equipment (net) Total Assets Liabilities Accounts payable Unredeemed gift cards Long term liabilities Stockholders' Equity Common stock Retained earnings Total Liabilities and Equity Required: Spiff Corporation Year 3 Year 2 Year 1 11,598 10,470 9,785 8,767 7,901 6,945 2,611 2,479 2,620 80 28 14 140 62 206 984 886 950 221 231 356 1,698 1,455 1,219 1,312 1,149 919 4,215 3,721 3,444 743 678 562 850 636 717 521 446 266 815 815 815 1,286 1,146 1,084 4,215 3,721 3,444 Hobbes, Inc. Year 3 Year 2 Year 1 14,268 15,624 16,256 10,894 11,723 12,333 2,500 2,650 2,612 220 458 432 654 793 879 3,732 3,348 2,819 506 375 450 2,891 2,851 2,407 4,288 3,720 3,620 11,417 10,294 9,296 3,029 2,824 2,424 469 410 500 3,109 2,611 2,497 1,290 1,290 1,290 3,520 3,159 2,585 11,417 10,294 9,296 1. Calculate the current ratio as well as the liabilities to stockholders' equity ratio for each company and assess the results. 2. Calculate the net income percentage as well as the return on investment ratio for each company and assess the results. 3. Based on your results in requirement 1 and 2, which company would you rather a. sell inventory to, if sold on account? b. make a long-term loan to? c. invest in? 4. If each company borrowed \$1,500 on a long-term loan, how would that transaction impact each ratio calculated in requirement 1 and 2?
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