Review the Financial Statements and make some initial observations about the company. Come up with at least 3 observations about the company. (For example, by looking at the Income Statement you can see that the company is currently operating profitably. Your observations can be simple or complex, broad or detailed.

Balance Sheet As of December 31 Year 5 Year 4 Year 3 Year 3 800,000 36,200 $ 20,000 $ Milavec Company Income Statement and Statement of Retained Earnings For the Years Ending Year 5 Year 4 Sales $ 1,600,000 $ 900,000 $ Cost of Goods Sold Beginning Inventory $ 70,000 $ 43,000 $ Purchases $ 1,078,000 $ 637,000 $ Goods available for sale $ 1,148,000 $ 680,000 $ Ending Inventory $ 60,000 $ 70,000 $ Cost of Goods Sold $ 1,088,000 $ 610,000 $ Gross Margin $ 512,000 $ 290,000 $ Operating Expenses $ 480,000 $ 248,000 $ Income before taxes $ 32,000 $ 42,000 $ Income taxes $ 12,800 $ 17,000 $ Net Income $ 19,200 $ 25,000 $ Plus: Beg bal Retained Earnings $ 162,000 $ 137,000 $ Less: Dividends $ 6,000 $ $ Ending Balance Retained Earnings $ 175,200 $ 162,000 $ Assets Cash Marketable Securities Notes Receivable Accounts Receivable Merchandise Inventory Prepaid Expenses Property Plant and Equipment (net) Total Assets $ $ $ $ 20,000 $ 20,000 $ 4,000 $ 50,000 $ 70,000 $ 4,000 $ 340,000 $ 508,000 $ 65,000 $ 60,000 $ $ 340,000 $ 521,200 $ 17,000 22,000 3,000 56,000 43,000 4,000 310,000 455,000 $ $ $ 40,000 483,000 523,000 43,000 480,000 320,000 280,000 40.000 18,000 22,000 130,000 15,000 137,000 Liabilities and Stockholder's Equity Accounts Payable $ Salaries Payable Taxes Payable $ Bonds Payable, 8% Preferred Stock, 6%, $100 par, cumulative $ Common Stock, $10 par $ Retained Earnings $ Total Liabilities and Stockholders' Equity $ 40,000 $ 2,000 $ 4,000 $ 100,000 $ 50,000 $ 150,000 $ 175,200 $ 521,200 $ 40,000 $ 2,000 $ 4,000 $ 100,000 $ 50,000 $ 150,000 $ 162,000 $ 508,000 $ 38,000 3,000 2,000 100,000 50,000 125,000 137,000 455,000