20. As a business owner, what are two things you might to do based on the indirect cash flow, margin analysis and efficiency analysis to get the company back on track? Explain your reasoning for each option and how you would expect your management action to affect the operations and future financial reports Answer Action #1: Reasoning Expected future results Action #2 Reasoning Expected future results 21. You decided the company was not in danger, so you did not follow through with your actions. One year later, you decided to complete liquidity ratios to calculate your ability to pay bills. Using the year-end balance sheets for Associated industries below, calculate the 2017 and 2018 current ratio and quick ratio for Associated Industries. The 2016 calculations are done for you as an example, Associated Industries Balance Sheet Assets 2016 2017 2018 Current Assets Cash Inventory Accounts Receivable $40,500 $12,652 $32,078 $54,000 $111,500 $184,576 $137,750 $151,750 $149.670 Total Current Assets $227,250 $275,902 $366,324 Plant, Property and Equipment $45,000 Less: Accumulated Depreciation ($2,250) $45,000 $45,000 ($4.500) Total Plant, Property and Equipment $42,750 ($5,750) $40,500 $38.250 Total Assets $270,000 $316,402 $404,574 Liabilities and Owners' Equity Liabilities Current Liabilities Accounts Payable $40,500 $80,739 $161,650 Current Portion of Bank Loan Payable $25,000 Total Current Liabilities $40.500 $80,739 $186,650 Long-Term Liabilities Bank Loan Payable $135,000 $135,000 $110,000 Total Long-Term Liabilities $135,000 $135,000 $110.000 Total I Liabilities Owners' Equity $175,500 $215,739 $296,650 Owners Investment Retained Eamings $90,000 $4,500 $90,000 $90,000 $10.663 $17.924 Total Owners' Equity $94,500 $100.663 $102.924 Total Liabilities and Owners' Equity $220,000 $316,402 $404,574 Answer Associated Industries 2016 2017 2018 Current Ratio 5.61 Louick Bat 4.28 22. Discuss the trends in Associated Industries' bill paying ability between the three years Answer 23. What is your evaluation of the ability for Associated Industries to pay their bills in 2018? Answer 24. Discuss your opinion of the importance of monitoring the financial data more frequently than once a year and being willing to take action when a trend is discovered. Answer: