The owner of GROC Inc. has had a busy three years. The owner is curious about...

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The owner of GROC Inc. has had a busy three years. The owner is curious about her company's performance as she compares its financial statements. She is interested in bringing on an investor and wants to know if after your analysis you would recommend the company for investment. The GROC Inc. is privately held so there is no market share price available and they are in a new industry so there are no other companies to compare to. Balance Sheet 2020 2019 2018 $ 7,800 $ 2,550 1,420 5,300 $ 3,050 3,550 1,270 460 4,900 2,350 2,040 Cash Accounts Receivable, Net Inventory Prepaid Expenses 860 420 Other Current Assets 410 420 10,130 31,400 Total Current Assets 13,040 13,630 90,000 Property and Equipment 75,000 Total Assets $ 88,040 $ 103,630 $ 41,530 $ 9,100 $ 39,400 9,100 $ 10,100 56,380 Current Liabilities Long-term Liabilities 16,200 Total Liabilities 48,500 65,480 26,300 Contributed Capital Retained Earnings 31,600 7,940 35,500 2,650 14,200 1,030 Total Shareholders' Equity 39,540 38,150 15,230 Total Liabilities and Shareholders' Equity $ 88,040 $ 103,630 $ 41,530 Income Statement Income Statement $ 91,000 $ 71,600 67,000 $ 55,000 53,500 Sales Revenue Cost of Goods Sold 40,500 19,400 5,100 14,500 8,100 Gross Profit 13,500 3,100 Operating Expenses Income from Operations 14,300 1,550 10,400 4,200 6,400 1,350 Interest Expense Income Before Income Tax Expense 12,750 3,890 6,200 1,680 5,050 2,150 Income Tax Expense Net Income $ 8,860 $ 4,520 $ 2,900 Required: l-a. Complete a horizontal analysis and comment on any items (favourable or unfavourable) that may be of interest to the investor. 1-b. Complete a full ratio analysis for 2020 (using the available information) and comment on each ratio as favourable or unfavourable. Write a short paragraph telling my why (or why not) the invstor should invest in the company. Support your conclusions with the pertanent outcomes from 1 a and b. The owner of GROC Inc. has had a busy three years. The owner is curious about her company's performance as she compares its financial statements. She is interested in bringing on an investor and wants to know if after your analysis you would recommend the company for investment. The GROC Inc. is privately held so there is no market share price available and they are in a new industry so there are no other companies to compare to. Balance Sheet 2020 2019 2018 $ 7,800 $ 2,550 1,420 5,300 $ 3,050 3,550 1,270 460 4,900 2,350 2,040 Cash Accounts Receivable, Net Inventory Prepaid Expenses 860 420 Other Current Assets 410 420 10,130 31,400 Total Current Assets 13,040 13,630 90,000 Property and Equipment 75,000 Total Assets $ 88,040 $ 103,630 $ 41,530 $ 9,100 $ 39,400 9,100 $ 10,100 56,380 Current Liabilities Long-term Liabilities 16,200 Total Liabilities 48,500 65,480 26,300 Contributed Capital Retained Earnings 31,600 7,940 35,500 2,650 14,200 1,030 Total Shareholders' Equity 39,540 38,150 15,230 Total Liabilities and Shareholders' Equity $ 88,040 $ 103,630 $ 41,530 Income Statement Income Statement $ 91,000 $ 71,600 67,000 $ 55,000 53,500 Sales Revenue Cost of Goods Sold 40,500 19,400 5,100 14,500 8,100 Gross Profit 13,500 3,100 Operating Expenses Income from Operations 14,300 1,550 10,400 4,200 6,400 1,350 Interest Expense Income Before Income Tax Expense 12,750 3,890 6,200 1,680 5,050 2,150 Income Tax Expense Net Income $ 8,860 $ 4,520 $ 2,900 Required: l-a. Complete a horizontal analysis and comment on any items (favourable or unfavourable) that may be of interest to the investor. 1-b. Complete a full ratio analysis for 2020 (using the available information) and comment on each ratio as favourable or unfavourable. Write a short paragraph telling my why (or why not) the invstor should invest in the company. Support your conclusions with the pertanent outcomes from 1 a and b.

Answer rating: 100% (QA)

1a Horizontal Analysis 1b FS Analysis Ratios 2 Based on the fin... View the full answer