Acme plumbing company sells plumbing fixtures on terms of 2/10, net 30. its financial statements over the last 3 years are as follows:
19x1 19x2 19x3
Cash 30,000 20,000 5,000
Accounts receivable 200,000 260,000 290,000
Inventory 400,000 480,000 600,000
Net fixed assets 800,000 800,000 800,000
1,430,000 1,560,000 1,695,000
Accounts payable 230,000 300,000 380,000
Accruals 200,000 210,000 225,000
Bank loan, short term 100,000 100,000 140,000
Long-term debt 300,000 300,000 300,000
Common stock 100,000 100,000 100,000
Retained earnings 500,000 550,000 550,000
1,430,000 1,560,000 1,695,000
Sales 4,000,000 4,300,000 3,800,000
Cost of goods sold 3,200,000 3,600,000 3,300,000
Net profit 300,000 200,000 100,000
Using the ratios below, analyze the company's financial condition and performance over the last 3 years. Are there any problems?
19x1 19x2 19x3
Current ratio
Acid- test ratio
Average collection period\
Average payment period
Inventory turnover
Total assets turnover
Debt Ratio
Times Interest earning ration
Gross profit margin
Net profit margin
Total asset turnover
Return on assets.