The Consolidated Statement of Financial Position

What is meant by the term "capital structure"?

Calculate and explain the following ratios for the current & the prior year:

a$.$ Debt Ratio

b$.$ Equity Ratio

c$.$ Interest Coverage Ratio

Is the change in each ratio favorable or unfavorable? How does this relate to

overall risk with respect to investing in the shares of Big Rock? $($Hint: Consider

the pro's & cons of debt versus equity financing in your discussion.$)$

In the Equity section of the Statement of Financial Position, I see negative

numbers for $2018$ and $2017$ called Accumulated Deficit? What does this mean?

What is liquidity and how is Big Rock doing with its liquidity position this year?

Is it better or worse than last year? Calculate and explain the following ratios:

a$.$ Current Ratio

b$.$ Quick Ratio

Cash flows from regular operations are dependent on the ability to sell inventory

and collect cash on credit sales. How many days on average would it take for Big

Rock to sell finished goods inventory and collect cash from credit customers?

Calculate and explain the following ratios:

b$.$ Average Collection Period

Note to Students: Use ending balances for receivables and inventory balances instead of average

balances. Also, for $13($a$),$ do not include inventory related to raw materials, containers, or

brews in progress as only completed brews would be sold to customers.

Note $11$ to the financial statements shows an $\frac{A}{R}$ Aging. What is this? Are

there any items of concern when you examine the A$/$R Aging in $2018$ relative

to the prior year?

Overall Conclusion

Overall, based on your analysis, should I purchase Big Rock shares? Or is this

investment too risky? Explain your reasoning.

a$.$ Days to Sell Inventory