BALANCE SHEETS	Current	Plan 1	Plan 2
Assets
Total current assets	500	300	700
Net fixed assets	500	700	700
Total assets	1000	1000	1400
Liabilities and equity
Acct pay & accrued liab.	100	125	140
Note payable	100	190	100
Total current liabilities	200	315	280
Long-term debt	100	190	395
Common stock	500	500	500
Retained earnings	200	245	225
Total liabilities and equity	1000	1250	1400
INCOME STATEMENTS	Current	Plan 1	Plan 2
Sales	2000	2500	2800
EBIT	100	125	140
Interest	16	16	79.36
EBT	84	109	60.64
Net Income	50.40	65.40	36.384
Dividends (30%)	15.12	19.62	10.92
Addition to Rd Earnings	35.28	45.78	25.47
Free cash flow	$60	($150)	($286)
Ratios	Current	Plan 1	Plan 2	Industry
Profit margin	0.025	0.026	0.013	0.040
Return on Equity	0.072	0.088	0.050	0.156
Debt/Assets	0.200	0.380	0.354	0.360
Times interest earned	6.25	7.81	1.764	9.400

• Do you recommend either plan 1 or plan 2 for Grace & Bell Company and why? Support you answer citing the projected outcomes from the case and the concepts that you have studied in this course.
• Address the impact of growth on future performance. Is the maximum growth possible always the best?
  • Why?
  • Support you answer citing the projected outcomes from the case and the concepts that you have studied in this course.