Practice ActivityModule 4 of 6
Analyze a small business
Lena runs a cleaning company. Use her numbers to answer the questions, then check your work.
| Lena's Cleaning Co. | Amount |
|---|---|
| Revenue | $96,000 |
| Cost of services (cleaners' wages and supplies) | $54,000 |
| Operating expenses | $30,000 |
| Net income before tax | $12,000 |
| Current assets | $20,000 |
| Current liabilities | $16,000 |
Your steps
6 steps
Check your answers
- Gross profit: $96,000 − $54,000 = $42,000.
- Gross margin: $42,000 ÷ $96,000 = 43.75%, or about 44%.
- Net margin: $12,000 ÷ $96,000 = 12.5%.
- Current ratio: $20,000 ÷ $16,000 = 1.25.
- Short-term debts: Yes, with a small cushion. Her current assets are 1.25 times her current liabilities.
- Cash flow question: For example, whether customers pay on time, or how much she spent on equipment this year.
Free template: Monthly Cash Flow TemplateUse it alongside this activity, or keep it for later.
Download Monthly Cash Flow Template