Question 1: Suppose that a company's inventory turnover has fallen in a year in which sales did not change. How would this change impact the quality and quantity of the company's liquidity?

Question 2: Describe the steps you would take to correct the following problem; you have just discovered that your company has a profit margin problem.

Question  3: On the next page you will find information about the Rologene Company. Using the historical data for year 2 as the base year, use the EFN equation to compute the amount of EFN the company will need given the assumptions for year 3. (Year 3 is the forecast year).

Question 4: In the space provided in the table on the next page, prepare a proforma balance sheet for year 3 for the Rologene Company. Use the percent of sales method.

Question 5: If you were to use the trend line approach to determine the year 3 proforma cash balance, what would this balance be? Show your work to receive credit.