Suppose you manage Outward Bound, Inc., a Vermont sporting goods store that lost money during the past year. To turn the business around, you must analyze the company and industry data for the current year to learn what is wrong. The company's data follow:

Requirement
1. On the basis of your analysis of these figures, suggest four courses of action Outward Bound might take to reduce its losses and establish profitable operations. Give your reason for each suggestion. (Challenge)

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Outward Bound, Inc. Common-Size Balance Sheet Data Outward Bound Industry Average Cash and short-term investments Trade receivables, net Inventory Prepaid expenses Total current assets Fixed assets, net Other assets Total assets 30% 15.2 64.2 1.0 83.4% 12.6 6.8% 11.0 60.5 0.0 78.3% 15.2 6.5 100.0% 4.0 Notes payable, short-term, 12% Accounts payable Accrued liabilities Total current liabilities Long-term debt 11% Total liabilities Common stockholders' equity Total liabilities and stockholders' equity 17.1%, 21.1 7.8 46.0 19.7 65.7 343 14.0% 5.1 7.9 47.0 16.4 63.4 36.6 Outward Bound, Inc Common-Size Income Statement Data Outward Bound Industry Average 100.0% 64.8 Net sales Cost of sales Gross profit Operating expense Operating income (loss) Interest expense Other revenue Income (loss) before income tax Income tax (expense) saving Net income (loss) 100.0% 68.2 31.8 35.2 32.3) 2.9 1.3 (5.3) 5.8) (10.0) 4.4 1.9 (0.8) 1.1%