Monday 24 February 2020

You are provided the following amount about Cradle Inc

You are provided the following amount about Cradle Inc.
2017
2018
2019
Sales
56,248
58,162
65,187
Cost of goods sold
35,047
36,205
42,372
Gross margin
21,201
21,957
22,815
Operating expenses
4,287
4,446
4,677
Depreciation
6,111
6,047
6,216
Net income before tax
10,803
11,464
11,922
Income tax
2,377
2,522
2,377
Net income
8,426
8,942
9,545
Cash
974
3,001
3,329
Accounts receivable
9,531
9,855
11,770
Inventory
7,886
8,046
10,004
Fixed assets, net
45,169
42,148
45,169
Line of credit
9,000
-
10,000
Accounts payable
4,381
4,526
5,296
Current portion of long term debt
3,862
3,247
4,124
Long term debt, net of current portion
31,149
35,167
26,197
Common stock
3,000
3,000
3,000
Retained earnings
12,168
17,110
21,655
Line of credit maximum
25,000
25,000
60,000
Does Cradle have liquidity issues?
In order to answer this question you should perform a cash inflow / outflow analysis and examine key liquidity ratios and interpret the results.

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