Price Auto Parts has hired you as a consultant to analyze the companys financial position. One of

Question:

Price Auto Parts has hired you as a consultant to analyze the company’s financial position. One of the owners, DeeAnn Price, is in charge of the company’s financial affairs. She makes all deposits and pays the bills but has an accountant prepare a and an income statement once a year. The business has been quite profitable over the years. In fact, two years ago Price opened a second store and is now considering a third outlet. The economy has slowed, however, and the company’s cash position has become very tight. The company is having an increasingly difficult time paying its bills. DeeAnn has not been able to explain satisfactorily to her partners what is happening. What factors should you consider, and what recommendations might you make to Price?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...