Question

Please show your work.

Liquidity Performance Analysis

1. Do a Cahs Flow Liquidity Analysis.

Analyze Trends in cash flow from operations from the indirect cash flow statement, Changes in the cash balance, Changes in the days cash conversion cycle, Changes in inventory days, Accounts receivables days, & Accounts payable days - to - analyze the reasons for any changes in the cash conversion cycle.

2. Calculate the growth rate for revenues over the 2 years and the sustainable growth rate, and compare them.

3. Discuss what these trends reveal about the firm's liquidity from a cash flow perspective.

Income Statement (in thousands)	2017	2016
Total Revenue	543,660	282,354
Cost of Revenue	448,467	246,109
Gross Profit	95,193	36,245
Selling & Administrative Exp.	41,515	37,652
Depreciaiton Expense	66,221	64,343
Total Operating Expense	107,736	101,995
Operating Income or Loss	(12,543)	(65,750)
Interest & other expenses	60,126	31,447
Earnings before Tax	(72,669)	(97,197)
Tax	(4,987)	(26,286)
Net Income	(67,682)	(70,911)
Dividends Paid	-	2,438
Addition to Ret. Earnings	(67,682)	(73,349)

Balance Sheet	2017	2016
Cash & Equivalents	17,513	4,074
Net Accounts Receivables	99,573	62,005
Inventory	22,230	15,169
Other Current Assets	7,921	9,466
Total Current Assets	147,237	90,714
Net Property, Plant & Equip.	259,039	273,210
Goodwill & Intangible Assets	157,301	201,430
Other Assets	15,282	10,740
Total Assets	578,859	576,094
Current Liabilities
Accounts Payable	29,643	18,823
Short-term Debt	241,509	244,534
Other Current Liabilities	15,268	12,417
Total Current Liabilities	286,420	275,774
Long-term Debt	5,081	12,134
Total Liabilities	291,501	287,908
Equity
Retained Earnings	(94,081)	(26,399)
Common Stock	381,439	314,585
Total Equity	287,358	288,186
Total Liabs. & Equity	578,859	576,094

Answer 1

Cash flow
Net profit/Loss during the year	-72,669
(+) Depreciation	66,221
(+) Interest exp	60,126
		53,678
Changes in Current assets
Increase in Net accounts receivables	-37,568
Increase in Inventory	-7,061
Decrease in Other current asset	1,545
Changes in Current Liabilities
Increase in Net accounts Payable	10,820
Decrease in Short term debt	-3,025
Increase in Other current liabilities	2,851
Cash generated from operations		21,240
(-) Taxes paid		-4,987
Net Cash generated from operations		16,253
Investing Activity
Purchase of net property & plant & equipments	-52,050
(2,59,039+66,221(Depreci)-2,73,210)
Sale of Intangible assets	44,129
(2,01,430-1,57,301)
Purchase of Other assets	-4,542
(15,282-10,740)		-12,463
		3,790
Finance activty
Decrease in Long term debt	-7,053
Increase in shares	66,854
interest exp	-60,126
		-325
		3,465