Income Statement for AyurWhistler:

Category	2022 (CAD)	2023 (CAD)
Revenue
Room Sales	300,000	330,000
Wellness Retreat Packages	100,000	110,000
Ayurvedic Cuisine	50,000	55,000
Yoga and Meditation	25,000	27,500
Early-Bird and Bundle Deals	25,000	27,500
Total Revenue	500,000	550,000
Expenses
Utilities	44,000	53,000
Staff Salaries and Wages	55,000	64,000
Maintenance and Repairs	33,000	42,000
Marketing and Advertising	22,000	31,000
Insurance	11,000	20,000
Food and Beverage Costs	22,000	31,000
Technology Upgrades	11,000	20,000
Training and Development	11,000	20,000
Laundry and Linen	6,600	15,600
Property Taxes and Licenses	4,400	13,400
Total Expenses	220,000	310,000
Net Income	280,000	240,000

Explanation:

The income statement summarizes the revenues and expenses of AyurWhistler for the years 2022 and 2023.

Revenue:

• The company earned revenue from various sources including room sales, wellness retreat packages, Ayurvedic cuisine, yoga and meditation sessions, and early-bird/bundle deals.
• In 2022, the total revenue was CAD 500,000, which increased to CAD 550,000 in 2023.
• This increase in revenue indicates growth in the company's sales and business activities over the two years.

Expenses:

• The expenses include utilities, staff salaries and wages, maintenance and repairs, marketing and advertising, insurance, food and beverage costs, technology upgrades, training and development, laundry and linen, and property taxes and licenses.
• Total expenses were CAD 220,000 in 2022 and CAD 310,000 in 2023.
• The increase in expenses reflects higher costs associated with running the business, such as increased staff salaries, marketing efforts, and maintenance expenses.

Net Income:

• Net income is calculated by subtracting total expenses from total revenue.
• In 2022, the company had a net income of CAD 280,000, which decreased to CAD 240,000 in 2023.
• Despite the increase in revenue, the higher increase in expenses led to a decrease in net income in 2023 compared to 2022.

Explanation:

Assessment and Recommendations:

• The liquidity position can be assessed using liquidity ratios such as the current ratio and quick ratio, which measure the company's ability to meet its short-term obligations.
• To improve liquidity, AyurWhistler may consider reducing expenses by optimizing operations, negotiating better deals with suppliers, and implementing cost-saving measures.
• Additionally, increasing revenue through targeted marketing strategies, expanding product offerings, and improving customer retention can enhance the company's liquidity position.
• It's also essential for AyurWhistler to maintain a balance between dividend payouts and retaining earnings for reinvestment to support future growth and ensure financial stability.

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2023 Financials:

• Cash and equivalents reduced from $50,000 to $20,000,
• Short-term investments rose from $20,000 to $25,000,
• Accounts receivable grew from $100,000 to $120,000,
• Prepaid expenses went up from $40,000 to $55,000,
• Total current assets inched up from $210,000 to $220,000,
• Accounts payable enlarged from $80,000 to $100,000,
• Accrued expenses went up from $40,000 to $50,000,
• Total current liabilities went up from $190,000 to $230,000.

Please find below the extracts from the minutes of our most recent meeting: Trainee Accountant: "Jude, after reviewing the financials, there's been an uptick in revenue to $550,000. Yet, our liquidity has weakened, and notably, our net income has dipped to $240,988 from last year's $280,908."

Jude: "Are all income sources included in this? And how much has our current ratio fallen?"

Trainee Accountant: "Yes, all income sources are considered. The surge in operating expenses to $310,000 is the main reason for our financial pinch, which also led to this year's profit decrease."

Jude: "This drastic turn from profit to a lower profit margin is worrying. We must scrutinize our growth strategy and financial controls. Could we have missed something in our accounts?"

Trainee Accountant: "Rest assured, the analysis is accurate. The loss is mainly due to the higher operating costs, especially from upgrading our spa facilities, impacting our earnings."

Jude: "It's a challenging time. Our investment in the wellness experience was substantial. We need to re-evaluate our strategies to ensure financial stability while still aiming for our long-term goals. We might have overextended financially."

make balance sheet of 2022 and 2023