Reference no: EM13892289

Financial data for Industrial Inc follows: ($ in thousands)
	Year 1	Year 2
Sales	$ 271,161	$ 457,977
Cost of goods sold	249,181	341,204
Net income	(155,034)	(403,509)
Cash flow from operations	(58,405)	(20,437)
Balance Sheet
Cash	341,180	268,872
Marketable securities	341,762	36,900
Accounts receivable	21,011	35,298
Inventories	6,473	72,106
Total current assets	$ 710,427	$ 413,176
Accounts payable	$  28,908	$  22,758
Accrued liabilities	44,310	124,851
Total current liabilities	$  73,218	$ 147,610

a. Calculate the current and quick ratio at the end of each year. How has the company's short-term liquidity changed over this period?

b. Assuming a 365-day year for all calculations, compute the following:

i. The collection period each year based on sales.

ii. The inventory turnover, and the payables period each year based on cost of goods sold.

iii. The days' sales in cash each year.

iv. The gross margin and profit margin each year.

c. What do these calculations suggest about the company's performance?