## Ratio calculations from financial statements, Financial Management

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Ricardo Martinez has prepared the following financial statement projections as part of his business plan for starting the Martinez Products Corporation.  The venture is to manufacture and sell electronic components that make standard overhead projectors "smart." In essence through voice commands a projector can be turned on, off, and the brightness of the projection altered.  This will allow the user to avoid audience annoyances associated with a bright projection light during periods when no overhead transparency is being used.  Venture investors usually screen prospective venture opportunities in terms of projected profitability and financial performance.

Use the following projected financial statement for Martinez Products to calculate financial ratios showing the venture's projected (a) gross profit margin, (b) net profit margin, (c) asset intensity, and (d) ROA

{Ratio Calculations} Ricardo Martinez, the founder of Martinez Products Corporations (see problem 8), projects sales to double to \$400,000 in the second year of operation.

If the financial rations calculated for year 1 in problem 8 remain the same in Year 2, what would be Martinez dollar amount projections in his business plan for (a) gross profit, (b) net profit or income, and (c) total assets?

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