RATIO ANALYSIS Consider the following information taken from Chicago Water Slide’s (CWS’s) financial statements:

September 30 (in thousands)

2008 2007 Current assets:

Cash and cash equivalents $ 2,548 $12,900 Receivables 60,142 33,096 Inventories 63,592 28,144 Other current assets 9,636 5,240 Total current assets $135,918 $79,380 Current liabilities:

Current portion of long-term debt $ 194 $ 7,060 Accounts payable 46,248 22,456 Accrued compensation costs 11,212 3,858 Accrued expenses 18,216 10,108 Other current liabilities 1,748 1,554 Total current liabilities $ 77,618 $45,036 Also, Chicago Water Slide’s Operating Cash Flows were $25,658 and $29,748 in 2008 and 2007, respectively.

Required:

. Calculate CWS’s current ratio for 2008 and 2007.

. Calculate CWS’s quick ratio for 2008 and 2007.

. Calculate CWS’s cash ratio for 2008 and 2007.

. Calculate CWS’s operating cash flow ratio for 2008 and 2007.

. Provide some reasons why CWS’s liquidity may be considered to be improving and some reasons why it may be worsening.

Cases Case