S&J Plumbing, Inc.'s 2010 income statement shows a net profit before tax of $468, whereas the balance sheet that the company's equity for the fiscal year-end 2010 is $1,746.
1) Calculate the company's return on equity and whether the managers are providing a good return on the capital provided by the company's shareholders.
2) Diagram the operating cycle of a service company.
In addition:
3) When analyzing statements, what external factors that affect business must be considered?
4) What are the similarities between a firm's capital budgeting decisions and individual investment decisions.