Deer Park Tavern has the following ratios:

2013 2014 2015

Current ratio 1.28:1 1.40:1 2.02:1

Accounts receivable turnover 14 times 24 times 31 times

Food inventory turnover 22 times 28 times 32 times

Total liabilities to total equity 1.00:1 1.52:1 2.00:1

ROE 11.0% 14.23% 15.92%

Cash $ 41,266 $ 53,750 $ 72,000

Annual revenue $1,880,000 $1,882,500 $1,892,300

a) Are current assets in relation to current liabilities increasing or decreasing? Explain.

b) Is the restaurant becoming more or less efficient in the collection of its accounts receivables?

Explain.

c) Is this restaurant becoming more or less liquid? Explain.

d) From the shareholders point of view, is the restaurants profitability improving or not

improving? Explain.

e) Explain the 3-year trend in solvency.

(10pts)