19. [Solvency and liquidity analysis] The Wamaco Group Inc. declared bankruptcy in June 2001 soon after publishing its finan- cial statements for its year ended December 31, 2000. Warnaco Group's financial data for 1997 through 1999 are presented in Exhibit 4P-4.

a. Discuss whether the information provided in the exhibit pro- vides any warning of the company's eventual demise. Your an- swer should be based on an analysis of Warnaco's 1998-1999 activity, solvency, liquidity, and profitability ratios.

b. Briefly describe any anomalies or peculiarities in Warnaco's ratios and/or financial data.

c. Warnaco's fiscal year 2000 annual report included the fol- lowing revisions and restatements of previous years' data: - The allowance for doubtful accounts was revised to $90. $86, and $94 million for 1997-1999, respectively, from the previously recorded amounts (of $46, $37, and 33 million). COGS and SGA for 1999 were increased by $12.4 million and $5.3 million, respectively. (Net income was not af- fected as income tax was reduced by $17.7 million.} Previous years' equity was reduced by $26 million Discuss the relevance of these items to parts a and b.