Part One Instructions

The financial information for the past two years $(2022$ and $2023)$ is provided. Megan's Mugs collection policy is $30$ days and the benchmark for the inventory is $45$ days. Using an Excel spreadsheet application, such as Microsoft Excel, and the information from the previous years, provide the following:

Prepare a Statement of Cash Flows for the current year using the indirect method.

Using horizontal analysis, prepare a Comparative Balance Sheet.

Using vertical analysis, prepare an Income Statement.

Using the textbook, calculate the ratios set out below:

a$.$ Current Ratio for years $2022$ and $2023.$

b$.$ Quick ratio for years $2022$ and $2023.$

c$.$ Accounts Receivable Turnover for the year $2023.$

d$.$ Number of Days Sales in Receivables for year $2023.$

e$.$ Inventory Turnover for the year $2023.$

f$.$ Number of Days Sales in Inventory for year $2023.$

g$.$ Ratio of Liabilities to Stockholders' Equity for the years $2022$ and $2023.$

h$.$ Return on Total Assets for the year $2023.$

i$.$ Return on Stockholders' Equity for the year $2023.$

j$.$ Earnings Per Share for the years $2022$ and $2023.$

The financial statements provided in this practice set can be downloaded from Blackboard. Read the instructions provided before downloading. An example of a Statement of Cash Flow has been provided at the end of the Practice Set. Download the Excel files $($Income Statement and Balance Sheet$)$ and add a column and calculate the ratios for the vertical and horizontal analysis.

$5.$ Acting as an accounting advisor to the firm, prepare a memo in which you analyze the financial statements you prepared in step two and prepare an analysis of the company's financial position. Identify two strengths and two weaknesses in the company. Make two recommendations to improve the company's financial position. Be specific in each of the recommendations and use the ratios to support your analysis. The length should be no more than one page.

Comparative Balance Sheet

Total Assets