The Castillo Products Company was started in 2014.The company manufactures components for personal decision assistant (PDA) products and for other hand-held electronic products.A difficult operating year 2015 was followed by a profitable 2016.However, the founders (Cindy and Rob Castillo) are still concerned about the venture's liquidity position and the amount of cash being used to operate the firm.Following are income statements and balance sheets for the Castillo Products Company for 2015 and 2016.

A.Use year-end data to calculate the current ratio, the quick ratio, and the net working capital (NWC) to total assets ratio for 2015 and 2016 for the Castillo Company.Explain what these changes might suggest.

B.Use Castillo's complete income statement data and the changes in balance sheet items between 2015 and 2016 to determine the firm's cash build and cash burn for 2016.Did Castillo have a net cash build or net cash burn for 2016?

C.Convert the annual cash build and cash burn amounts calculated in Part B to monthly cash build and cash burn rates.Also indicate the amount of the net monthly cash build or cash burn rate. What does this suggest about their need for external financial capital?