Champlain Books Ltd. (Champlain) is a small independent book seller in a Canadian city. Book selling is a tough competitive business but Champlain has managed to succeed by providing good service, offering hard to-find book titles, and building a loyal clientele. The owner of the store, Sam Champlain, has been concerned recently about the store’s performance, mainly a declining cash balance, despite increasing sales. Sam has asked you to look at the store’s performance over the last five years to see if you can see any problems he should ad-dress. He has provided you with the following information:

Required:
Examine the information provided to you by Sam Champlain and from your analysis prepare a report explaining any problems you identify and the consequences of the problems. Provide possible explanations and solutions that might resolve theproblems.

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Champlain Books Ltd. Selected Financial Information for the Year Ended December 31, 2018 2017 2016 2015 2014 2013 Sales Cost of sales 329695 317,015 311.409 302.928 293250 Gross margin 143,969142,853 141,662 141,260 18,000 Inventory $473,664 $459,868 S453,071 $444,188 $431,250 $ 148,358 8, 130,804 124,338 117,300 113,780