Suppose you manage High Peaks Performance, Inc., a Vermont sporting goods store that lost money during the past year. To turn the business around, you must analyze the company and industry data for the current year to learn what is wrong. The company’s data follow:

Requirement

Based on your analysis of these figures, suggest four courses of action High Peaks might take to reduce its losses and establish profitable operations. Give your reason for each suggestion.

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A1 High Peaks Performance, Inc. Common-Size Balance Sheet Data 1 High Peaks Industry Average 6.8% 3 Cash and short-term investments 4 Trade receivables, net 5 Inventory 6 Prepaid expenses 7 Total current assets 8 Fixed assets, net 9 Other assets 10 Total assets 3.0% 15.2 64.2 1.0 11.0 60.5 0.0 83.4% 12.6 78.3% 15.2 6.5 4.0 100.0% 100.0% 11 12 Notes payable, short-term, 12% 13 Accounts payable 14 Accrued liabilities 15 Total current liabilities 16 Long-term debt, 11% 17 Total liabilities 18 Common stockholders' equity 19 Total liabilities and stockholders' equity 20 14.0% 25.1 17.1% 21.1 7.8 46.0 19.7 65.7 34.3 100.0% 7.9 47.0 16.4 63.4 36.6 100.0%