Sanjay Supplies Limited is concerned about its ability to pay its debts. Selected financial information follows

Analyze the information and explain why Sanjay is experiencing problems with its cash balance. What could Sanjay do to reduce these problems?

Sanjay Supplies Limited selected Financial Information (in thousands) Years ended October 31 2016 Sales on credit $17,100 Cash 20 Short-term investments (cashable on demand) Accounts receivable 2,130 Inventories 1,730 Short-term bank loans (payable on demand) 560 Accounts payable 340 Other short-term liabilities 80 2015 $16,300 60 1,510 1,250 140 490 80 2014 $12,700 210 40 1,180 940 610 80