Selected data from Tompkin Furniture, Inc., follows.

Industry averages have been gathered for several ratios.

Requirements

1. Perform a trend analysis on Tompkin’s sales revenue, inventory, and receivables over the past three years, using 2015 as the base. Is the trend in each of these areas favorable or unfavorable for the company?

2. Using the industry averages as benchmarks, analyze Tompkin’s performance over the past three years in the following areas:

a. Liquidity

b. Turnover

c. Overall debt payment ability

d. Profitability

3. Evaluate Tompkin’s quality of earnings. Are there any red flags in your analysis? Explain.

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Selected balance sheet data 2018 2017 2016 2015 Cash. . Marketable securities.. Accounts receivable, net.. $ 2,800 $ 3,000 $ 4,200 400 600 500 5,100 $ 4,800 6,700 6,300 Inventory... Total current assets... 6,000 4,200 3,200 3,000 15,900 14,100 13,000 Long-term assets... 6,900 7,800 9,200 Total assets... 22,800 21,900 22,200 Accounts payable. . Short-term notes payable. . Total current liabilities. .. Total long-term liabilities. . 3,500 2,300 1,500 1,900 3,750 6,000 4,600 9,500 6,900 5,250 2,725 265 6,982 2016 2015 Selected income statement data Net sales revenue (assume all sales are credit sales)... $ 34,500 $ 33,000 $ 32,100 $ 31,500 Cost of goods sold. . Operating expenses.. Interest expense.. 2018 2017 15,840 14,445 20,700 12,500 13,500 255 13,700 150 390 300 Income taxes.... 1,098 1,187