Question

Marion has just received the year-end financial statements shown below. Evaluate the state of her company from the perspective of shareholders. What should Marion conclude based on this, and what possible actions can be recommended?
Marion's, Inc.
Income Statement		2012		Cash Flow Statement
Revenue		$3,906,000		Balance Forward		$212,500
	Returns, Credits, etc.	($1,400)		Net Income	$124,480
	Net Sales (Revenue)	$3,904,600		Depreciation	$75,000
Direct Costs				Change in Working Capital	($17,140)
	Labor	($1,450,000)		Capital Expenditures	($70,000)
	Materials	($989,000)		Financial Activities	($75,000)
	Cost of Goods Sold (COGS)	($2,439,000)		Net change in cash	$37,340
	Gross Margin	$1,465,600		Ending Cash Balance		$249,840
Selling General and Admin.
	Marketing	($400,000)
	Research and Development	($350,000)
	Administration	($250,000)
	Other	($200,000)
	Depreciation	($75,000)
	S G & A	($1,275,000)
Earnings Before Interest and Taxes (EBIT)		$190,600
	Interest Expense/Income	($35,000)
	Pre-tax Income	$155,600
	Income Tax @ 20%	($31,120)
	Net Income	$124,480
Balance Sheets, 2011
Assets				Liabilities
Current Assets				Current Liabilities
	Cash	$249,840			Accounts Payable	$125,000
	Accounts receivable	$60,160			Taxes Payable	$10,000
	Finished Goods Inventory	$40,000		Total Current Liabilities		$135,000
	Materials Inventory	$85,000		Long Term Liabilities
Total Current Assets		$435,000			Bank Loans @ 6%	$125,000
					Mortgage @ 4.5%	$460,000
Long term Assets				Total Long Term Liabilities		$585,000
	Buildings	$1,050,000
	Equipment and machines	$80,000		Capital	Stock	$650,000
	Other	$100,000			Retained Earnings	$295,000
Total Fixed Assets		$1,230,000		Stockholders Equity		$945,000
Total Assets		$1,665,000		Total Liabilities and Stockholders equity		$1,665,000
	Current Stock Price	$44.25
	Current Outstanding Shares	5,000