Exhibit $1$: Simplified Balance Sheets for ABC Tech Inc. $($in $ thousands$)$

$\backslash$table$[[$Year$,2023,2022,2021,2020,2019],[$Assets$,,,,,],[$Cash & Cash Equivalents,$15,000,12,000,10,000,9,000,8,000],[$Accounts Receivable,$8,000,7,000,6,500,6,000,5,500],[$Inventory$,3,500,3,300,3,200,3,100,3,000],[$Property$,$ Plant & Equipment,$25,000,23,000,22,000,21,000,20,000],[$Less: Accumulated Depreciation,$(5,000),(4,500),(4,000),(3,500),(3,000)],[$Net Property, Plant & Equipment,$20,000,18,500,18,000,17,500,17,000],[$Total Assets,$46,500,40,800,37,700,35,600,33,500]]$

$\backslash$table$[[$Liabilities & Stockholders' Equity,,,,,$],[$Accounts Payable,$7,000,6,800,6,600,6,400,6,200],[$Short$-$term Debt,$4,000,3,500,3,000,2,500,2,000],[$Long$-$term Debt,$15,000,12,000,10,000,9,000,8,000],[$Total Liabilities,$26,000,22,300,19,600,17,900,16,200],[$Stockholders$\text{'}$ Equity,$20,500,18,500,18,100,17,700,17,300],[$Total Liabilities and Equity,$46,500,40,800,37,700,35,600,33,500]]$

Exhibit $2$: Simplified Income Statements for ABC Tech Inc. $($in $ thousands$)$

$\backslash$table$[[$Year$,2023,2022,2021,2020,2019],[$Revenues$,75,000,70,000,65,000,60,000,55,000],[$Cost of Goods Sold,$(45,000),(42,000),(39,000),(36,000),(33,000)],[$Gross Profit,$30,000,28,000,26,000,24,000,22,000],[$Selling$,$ General and Admin. Expenses,$(15,000),(14,500),(14,000),(13,500),(13,000)],[$Depreciation$,(500),(500),(500),(500),(500)],[$Operating Income $($EBIT$),14,500,13,000,11,500,10,000,8,500],[$Interest Expense,$(1,500),(1,200),(1,000),(900),(800)],[$Income Before Taxes,$13,000,11,800,10,500,9,100,7,700],[$Taxes $(30\%),(3,900,(3,540),(3,150),(2,730),(2,310)],[$Net Income,$9,100,8,260,7,350,6,370,5,390]]$ Exhibit $3$: Simplified Balance Sheets for ABC Tech and Peer Firms as of $2023($in $ thousands$)$

Liabilities & Stockholders'

Equity

Exhibit $4$: Simplified Income Statements for ABC Tech and Peer Firms as of $2023($in $ thousands$)$Question $1$

Using the definitions we introduced in class, calculate the following financial ratios for ABC Inc for

the years $2019-2023.$ Round all numbers to two digits and tabulate the results in a table similar to the

one below.

Part $2$:

Based on your analysis in Question $1,$ briefly answer the following questions about ABC financial

health and performance over the past five years.

$$ How has ABC$$s quick ratio evolved over the past five years? What does ABC$$s current liquidity

ratio imply about its ability to meet its short$-$term obligations?

$$ How have ABC$$s debt management ratios evolved over the past five years? How is the firm

positioned to meet its interest expenses?

$$ How has ABC$$s ROE evolved over the past five years?

$$ Based on the components of the DuPont Equation, why is ABC$$s ROE in $2023$ higher$/$lower

than its ROE in $2019?$