Are current assets increasing or decreasing in relation to current liabilities?

Cloud Profitability
January 4, 2018
Assess the financial health of Great Lakes Indusrial Supply, Inc. in past and forecasted periods. Specifically, calculate the financial ratios defined in the worksheet financial ratios and interpret the results.
January 4, 2018

Are current assets increasing or decreasing in relation to current liabilities?

A clothing retailer has the following statistical information calculated from


A clothing retailer has the following statistical information calculated from its financial statements for the past three years:

Using the information above, answer each of the following questions and explain your answer.

a. Are current assets increasing or decreasing in relation to current liabilities?

b. Is the retailer becoming more or less efficient in the collection of its accounts receivable?

c. Over the three-year period, has more or less money been tied up in inventory?

d. From the shareholders’ point of view, is profitability improving or not improving?

e. Suppose the retailer needs to borrow capital through long-term debt. Would it be easier to find a lender now, or would it have been easier three years earlier?

f. Has the retailer been using leverage to the advantage of the shareholders over the three-year period?

 

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