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Acme plumbing company sells plumbing fixtures on terms of 2/10, net 30

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Acme plumbing company sells plumbing fixtures on terms of 2/10, net 30. its financial statements over the last 3 years are as follows:

19x1 19x2 19x3

Cash 30,000 20,000 5,000

Accounts receivable 200,000 260,000 290,000

Inventory 400,000 480,000 600,000

Net fixed assets 800,000 800,000 800,000

1,430,000 1,560,000 1,695,000

Accounts payable 230,000 300,000 380,000

Accruals 200,000 210,000 225,000

Bank loan, short term 100,000 100,000 140,000

Long-term debt 300,000 300,000 300,000

Common stock 100,000 100,000 100,000

Retained earnings 500,000 550,000 550,000

1,430,000 1,560,000 1,695,000

Sales 4,000,000 4,300,000 3,800,000

Cost of goods sold 3,200,000 3,600,000 3,300,000

Net profit 300,000 200,000 100,000

Using the ratios below, analyze the company’s financial condition and performance over the last 3 years. Are there any problems?

19x1 19x2 19x3

Current ratio

Acid- test ratio

Average collection period

Average payment period

Inventory turnover

Total assets turnover

Debt Ratio

Times Interest earning ration

Gross profit margin

Net profit margin

Total asset turnover

Return on assets.