Explaqin advantage of any available cash discounts, Financial Management

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Assume that you have been consistently impressed by David and Tom Gardner of The Motley Fool since you first heard of their rather improbable rise to prominence in financial circles.

You learn of a staff opening at The Motley Fool and decide to apply for it. Your resume is successfully screened from the thousands received and you advance to the interview process. You learn that the interview consists of analyzing the following financial facts and answering analysis questions. (Note: The data are taken from a small merchandiser in outdoor recreational equipment.)

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Required:

Use these data to answer each of the following questions with explanations. (Your answers should be in complete sentences; one paragraph (of two or more sentences) for each question.)

1. Is it becoming easier for the company to meet its current liabilities on time and to take advantage of any available cash discounts? Explain.

2. Is the company collecting its accounts receivable more rapidly? Explain.

3. Is the company's investment in accounts receivable decreasing? Explain.

4. Is the company's investment in plant assets increasing? Explain.

5. Is the owner's investment becoming more profitable? Explain.

6. Did the dollar amount of selling expenses decrease during the three-year period? Explain.


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