One part of financial analysis is analyzing the same company over many years using a trend analysis.
Using the information you prepared for Assignment #3 (the Accounting Cycle Problem) for Jones, Inc., answer the following questions:
1. How is Jones' liquidity trending from one year to the next?
2. How is Jones' solvency trending from one year to the next?
3. How has Jones' asset base changed over time? Will this allow the company to meet consumer demand for their product? Why or why not?
4. Jones' current assets have increased over time. What is the major reason for this increase? Is this a problem? Why or why not?
5. How has Jones' total liabilities changed over time?
6. How has Jones' current liabilities changed over time? How will the company be able to pay them when they are due?
7. Is there consistent growth in revenue? If not, is this a problem?
8. Has Cost of Goods Sold remained a consistent percentage of Revenue? If not, is this a problem?
9. Is net income a consistent percentage of Revenue? If not, is this a problem?
10. If notes receivable decreased in 2019, why did interest expense increase?