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1. the financial management practices by adam with managing garners menswear 2. given data available or interpretinf financial viability, explain ratio results and reasoning for interpretation of the financials 3. recommendations for adam to aid the decline and to restore profitability levels that garner menswear previously enjoyed. as much evidence as possible please regards. GARNER MEN'S WEAR Gamer Men's Wear is a relatively small independent men's wear resilier located in Oshawa, Ontario, that has been Operating for more than 30 years. The owner Adam Garner, previously worked for 10 years at Tip Top Talora rational chain of men's formal clothing, before starting his own store. Although the first few years were difficultas the business was getting established, Adam was eventually able to develop the business and provide superior ser vce while offering high quality men's clothing at competitive prices. His target market is made up of middle aged executives and professionals, most of whom he knows on a first name basis Adomas ways felt that the takes care of his best customers, the financial part of the business will take care of itself He is comfortable with this phl losophy because he really does not enjoy at the bookwork that is part of running a business Recently, however, he has become concerned about the performance of the business. One of his concerns includes the fancial aspects of the business. He seems to always have lots of customers, but when he gets this financial statements from his accountant about two months after the year-end, nes surprised and disappointed to find that the net income of the business has dropped to $10.000 and there is no cash in the business bank account. Assume that you have been called in to evaluate Adam's business. He provides you with the following financial statements for the last two years Assets Liabilities and Equity Current Current Liabilities Cash S $ 10,000 Accounts payable Accounts Receivable $ 120,000 $90,000 Current portion of debt Inventory $ 80,000 $ 50,000 Total Current Liabilities Prepaid expenses $ 2.475 $ 5,285 Long-term Liabilities Total Current Assets $ 202,475 $ 155,285 Debt Fixed Total Liabilities Property and equipment $ 130,000 $ 140,000 Equity Total Assets $ 332,475 $ 295,285 Total Liabilities - Equity $ 50,000 $ 40,000 $ 4,670 $ 3,320 $ 54,670 $ 43,320 $ 120.000 $ 100,000 $ 174,670 $ 143,320 $ 157 805 $ 151965 $ 332,475 $ 295,285 Income Statement for year ended 31 December 2016 and 31 December 2015 2016 2015 Sales Suits $ 547,890 $ 592,570 Casuals $ 166,910 $ 152,730 Other miscellaneous $ 5,200 4,700 Total Sales $ 720,000 $ 750,000 Cost of goods sold Suits $ 350,650 $ 373,319 Casuals $ 136,850 $ 124,284 Other miscellaneous $ 2,500 $ 2,397 Total cost of goods sold $ 490,000 $ 500,000 Expenses Wages $ 147,667 $ 130,182 Rent 49,500 S 48,000 Utilities and telephone 15,163 S 16,238 Interest 4,670 S 3,320 Repairs and maintenance S 3.000 $ 2,260 Total expenses $ 220,000 $ 200,000 Total cost of COGS and expenses $ 710.000 $ 700.000 Net income/lossi S 10.000 $ 50.000 GARNER MEN'S WEAR Gamer Men's Wear is a relatively small, independent men's wear retailer located in Oshawa, Ontario, that has been operating for more than 30 years. The owner, Adam Garner previously worked for 10 years at Tip Top Tailor, a national chain of men's formal clothing, before starting his own store. Although the first few years were difficult as the business was getting established, Adam was eventually able to develop the business and provide superior ser- vice while offering high-quality men's clothing at competitive prices. His target market is made up of middle-aged executives and professionals, most of whom he knows on a first name basis. Adam has always felt that if he takes care of his best customers, the financial part of the business will take care of itself. He is comfortable with this phi losophy because he really does not enjoy all the bookwork that is part of running a business Recently, however, he has become concerned about the performance of the business. One of his concerns includes the financial aspects of the business. He seems to always have lots of customers, but when he gets his financial statements from his accountant obout two months after the year-end, he is surprised and disappointed to find that the net income of the business has dropped to $10,000 and there is no cash in the business bank account. Assume that you have been called in to evaluate Adom's business. He provides you with the following financial statements for the last two years 1. the financial management practices by adam with managing garners menswear 2. given data available or interpretinf financial viability, explain ratio results and reasoning for interpretation of the financials 3. recommendations for adam to aid the decline and to restore profitability levels that garner menswear previously enjoyed. as much evidence as possible please regards. GARNER MEN'S WEAR Gamer Men's Wear is a relatively small independent men's wear resilier located in Oshawa, Ontario, that has been Operating for more than 30 years. The owner Adam Garner, previously worked for 10 years at Tip Top Talora rational chain of men's formal clothing, before starting his own store. Although the first few years were difficultas the business was getting established, Adam was eventually able to develop the business and provide superior ser vce while offering high quality men's clothing at competitive prices. His target market is made up of middle aged executives and professionals, most of whom he knows on a first name basis Adomas ways felt that the takes care of his best customers, the financial part of the business will take care of itself He is comfortable with this phl losophy because he really does not enjoy at the bookwork that is part of running a business Recently, however, he has become concerned about the performance of the business. One of his concerns includes the fancial aspects of the business. He seems to always have lots of customers, but when he gets this financial statements from his accountant about two months after the year-end, nes surprised and disappointed to find that the net income of the business has dropped to $10.000 and there is no cash in the business bank account. Assume that you have been called in to evaluate Adam's business. He provides you with the following financial statements for the last two years Assets Liabilities and Equity Current Current Liabilities Cash S $ 10,000 Accounts payable Accounts Receivable $ 120,000 $90,000 Current portion of debt Inventory $ 80,000 $ 50,000 Total Current Liabilities Prepaid expenses $ 2.475 $ 5,285 Long-term Liabilities Total Current Assets $ 202,475 $ 155,285 Debt Fixed Total Liabilities Property and equipment $ 130,000 $ 140,000 Equity Total Assets $ 332,475 $ 295,285 Total Liabilities - Equity $ 50,000 $ 40,000 $ 4,670 $ 3,320 $ 54,670 $ 43,320 $ 120.000 $ 100,000 $ 174,670 $ 143,320 $ 157 805 $ 151965 $ 332,475 $ 295,285 Income Statement for year ended 31 December 2016 and 31 December 2015 2016 2015 Sales Suits $ 547,890 $ 592,570 Casuals $ 166,910 $ 152,730 Other miscellaneous $ 5,200 4,700 Total Sales $ 720,000 $ 750,000 Cost of goods sold Suits $ 350,650 $ 373,319 Casuals $ 136,850 $ 124,284 Other miscellaneous $ 2,500 $ 2,397 Total cost of goods sold $ 490,000 $ 500,000 Expenses Wages $ 147,667 $ 130,182 Rent 49,500 S 48,000 Utilities and telephone 15,163 S 16,238 Interest 4,670 S 3,320 Repairs and maintenance S 3.000 $ 2,260 Total expenses $ 220,000 $ 200,000 Total cost of COGS and expenses $ 710.000 $ 700.000 Net income/lossi S 10.000 $ 50.000 GARNER MEN'S WEAR Gamer Men's Wear is a relatively small, independent men's wear retailer located in Oshawa, Ontario, that has been operating for more than 30 years. The owner, Adam Garner previously worked for 10 years at Tip Top Tailor, a national chain of men's formal clothing, before starting his own store. Although the first few years were difficult as the business was getting established, Adam was eventually able to develop the business and provide superior ser- vice while offering high-quality men's clothing at competitive prices. His target market is made up of middle-aged executives and professionals, most of whom he knows on a first name basis. Adam has always felt that if he takes care of his best customers, the financial part of the business will take care of itself. He is comfortable with this phi losophy because he really does not enjoy all the bookwork that is part of running a business Recently, however, he has become concerned about the performance of the business. One of his concerns includes the financial aspects of the business. He seems to always have lots of customers, but when he gets his financial statements from his accountant obout two months after the year-end, he is surprised and disappointed to find that the net income of the business has dropped to $10,000 and there is no cash in the business bank account. Assume that you have been called in to evaluate Adom's business. He provides you with the following financial statements for the last two years