Though his sales are increasing from year to year, Hugh G. Losses, President of USS Enterprises, is concerned because his competitors are stealing some of his prime customers (he is, in effect, beginning to lose his share of the market). Puzzled by these developments, he has hired you to analyze his financials. He has given to you the following key financial items from his annual statements:
|
|
2015 |
2014 |
2013 |
2012 |
2011 |
|
| Net Sales |
|
|
$298,000 |
$256,000 |
$213,000 |
$165,000 |
$135,000 |
|
| Cost of Goods Sold |
|
125,000 |
108,000 |
89,000 |
69,000 |
57,000 |
|
| Ending Gross Receivables |
|
26,000 |
26,000 |
25,000 |
25,000 |
23,000 |
|
| Ending Inventory |
|
24,000 |
18,000 |
12,000 |
8,000 |
4,000 |
|
| Total Current Assets |
|
52,000 |
46,000 |
39,000 |
37,000 |
32,000 |
|
| Total Current Liabilities |
|
$24,000 |
$23,000 |
$22,000 |
$21,000 |
$18,000 |
|
|
|
|
|
|
|
|
|
First of all, calculate out the current ratio, quick ratio, Working Capital, Days Sales in Receivables (DSR) and Days Sales in Inventory (DSI) for all 5 years to assist in helping you better evaluate Enterprises' issues (25 points).
Then, focusing on the liquidity and associated ratios, comment on this company's liquidity position and the trends that the liquidity ratios show.