Using the same information listed below, answer the q. 42 that follows.

Income Statement

For the year of: Year 1 Year 2

Sales $2,400,000 $3,000,000

Cost of Sales $ 720,000 $ 960,000

Gross Profit XXXXXXX (31)

Payroll Expenses $ 600,000 $ 720,000

Gen. & Admin. Exp. $ 288,000 $ 360,000

Other Expenses $ 225,000 $ 336,000

EBIT $ (32) $ 624,000

Interest $ 15,000 $ 24,000

EBT $ (33) (34)

Income Taxes (40%) $ (35) $ (36)

Net Income $ (37) $ (38)

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Balance Sheets

On December 31 of

Year 0 Year 1 Year 2

Total Assets: $1,000,000 $1,400,000 $_____(39)

Curr. Liability $ 50,000 $ 100,000 $ 120,000

L/T Liability $ 450,000 $ 300,000 $ 480,000

Owners Equity $ (40) $1,000,000

1. Determine the growth rate (in %) of the companys revenues in Year 2 from those of Year 1.

2. In which year (Y-1 or Y-2) did the company conduct its overall cost control (for the entire operations) better?

3. Which years (Y-1 or Y-2) investment (into assets) was more effectively used in generating revenues?

4. Which ratio has been asked in the previous question (2).

5. What is the rate (%) of return on the companys investment in Year 2?

6. What is the rate (%) of return the company has contributed to its owners investment in Year 2?

7. Which ratio was asked in the previous question (5)

8. Which ratio was asked in the previous question (6)

9. If the company (that you have analyzed in the previous questions) achieve the same rate of growth in Revenues (Sales) in the Year 3, what is the expected amount of Revenues?