INCOME STATEMENT FOR Jan 2023 INCOME LESS EXPENSES WAGES RENT SUPPLIES USED TOTAL NET INCOME (LOSS) 1. LIQUIDITY CURRENT=CA/CL ACID TEST & CASH/CL 2. PROFITABILITY ROA= 3. LEVERAGE RATIOS Return on Equity NI/TA TL/TA 600 500 $70.00 $1,000 1,170 -170 2340/510 -4.6 2.0 IS OK 850/510 1 IS OK #1.7 -170/2340-7.3% 10% IS OK 510/2340 = 22% 50% IS OK Interpret the results of the ratios calculations from ABC consulting and provide a recommendation for this organization:

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INCOME STATEMENT FOR Jan 2023 INCOME $1,000 LESS EXPENSES WAGES 600 RENT 500 SUPPLIES USED $70.00 TOTAL 1,170 -170 NET INCOME (LOSS) RATIOS 1. LIQUIDITY CURRENT-CA/CL ACID TEST CASH/CL 2. PROFITABILITY ROA NITA 3 LEVERAGE Return TL/TA on Equity 2340/510 46 2015 OK 850/510 -1.7 1 IS OK -170/2340-7.3% 10% IS OK 510/2340 22% 50% IS OK Interpret the results of the ratios calculations from ABC consulting and provide a recommendation for this organization INCOME STATEMENT FOR Jan 2023 INCOME $1,000 LESS EXPENSES WAGES 600 RENT 500 SUPPLIES USED $70.00 TOTAL 1,170 -170 NET INCOME (LOSS) RATIOS 1. LIQUIDITY CURRENT-CA/CL ACID TEST CASH/CL 2. PROFITABILITY ROA NITA 3 LEVERAGE Return TL/TA on Equity 2340/510 46 2015 OK 850/510 -1.7 1 IS OK -170/2340-7.3% 10% IS OK 510/2340 22% 50% IS OK Interpret the results of the ratios calculations from ABC consulting and provide a recommendation for this organization