Analyses the statement of cash flows and explain whether the cash flows are improving or deteriorating from 2016 to 2017, and from 2017 to 2018

Q1:

Calculate the following eight financial ratios for each of the three years 2016 to 2018. Use the definitions given in the lecture slides and round final answers to one decimal place; for Debt ratio and Net profit margin ratio, show final answers as percentages. Explain how each ratio has improved or deteriorated from 2016 to 2017, and 2017 to 2018; include the 2018 industry averages in your explanation.

  2016 2017 2018
Current ratio      
Days’ sales uncollected      
Days’ sales in inventory      
Days’ purchases in accounts payable      
Cash conversion cycle      
Debt ratio      
Times interest earned      
Net profit margin ratio      

 

Q2:

Analyses the statement of cash flows and explain whether the cash flows are improving or deteriorating from 2016 to 2017, and from 2017 to 2018

 

Q3:

If you are Vincent Quek, would you recommend that your bank lend $10 million to FlashGlam? Use information in the mini case and the calculations done for the earlier two questions to support your recommendation, i.e., no need to do more calculations for this final question. Be concise and write no more than six sentences.