1. Based on the information below, provide a liquidity analysis of Foodilicious Inc. (working capital, current ratio, quick ratio) and compute its gross profit margin before and after the necessary adjustments that will make Foodilicous comparable to Cat & Rest (remember: Cat & Rest uses FIFO to value its inventory.) Use the Excel template to show your analysis for the four years, where possible.

2. Now that you have adjusted the data, analyse the efficiency of Foodilicious Inc. by computing various turnover ratios such as inventory turnover, accounts receivable turnover, and also the days of inventory on hand, the numbers of days to sell the inventory and sales growth. What can you conclude with the results? Answer all questions in the Excel file provided.

Note: instead of using credit sales for accounts receivable turnover, use total sales.

3. Finally, using the data below for Cat&Rest, how does the firm compare to its competitor (Foodilicious) in term of liquidity and efficiency? Provide potential explanations for the differences.

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Foodilicious Ine. Cat& Rest SA (in thousand USD) 2016 2015 2014 2013 (in thousand USD) 2015 2014 2016 2013 24,000 29,000 6,000 54,000 19,000 25,000 22,000 56,000 20,000 18,000 16.000 52,000 18,000 16,000 50,000 17,000 Cash and marketable securities 23,000 28,000 Cash and marketable securities Accounts receivable Prepaid expenses Inventory (LIFO) Equipment Buildings Intangibles 30,000 27,000 Accounts receivable Prepaid expenses Inventory (FIFO) Equipment Buildings Intangibles 5,000 7,000 8,000 17,000 15,000 40,500 34,000 37,000 150,000 240,000 400,000 14,000 12,000 10,000 90,000 40,600 105,000 120,000 90,000 15,000 90,000 15,000 40,000 120,000 135,000 90,000 200,000 400,000 15,000 40,000 160,000 15,000 400,000 400,000 40.000 40,000 Accounts payable Accounts payable Short-term loan payable Long-term loan payable Common stoc k Retained earnings 42,000 44,000 24,000 216,000 350,000 193,000 40,000 46,000 7,000 8,000 9,000 10,000 24,000 192,000 350,000 6,000 24,000 24,000 24,000 Short-term loan payable 6,000 6,000 12,000 6,000 168,000 240,000 Long-term loan payable 18,000 30,000 350,000 224,000 350,000 Common stock 180,000 180,000 180,000 180,000 143,600 171,500 Retained earnings 50,000 37,000 24,000 11,000 LIFO reserve COGS Gross profit 5,000 4,800 3,700 4,400 LIFO reserve 130,000 91,000 140,000 125,000 137,000 COGS 121,000 120,000 119,000 118,000 98,000 87,500 95,900 Gross profit 98,000 97,000 96,000 95,000 Foodilicious Inc. (in thousand USD) 2013 Cat&Rest SA (in thousand USD) 2016 2015 2014 2016 2015 2014 2013 BEFORE adjustments Current assets Current liabilities Current ratio Quick ratio Working capital Inventory COGS Gross profit AFTER adjustments Adjusted inventory (FIFO) Adjusted current assets Current liabilities Adjusted current ratio Adjustred quick ratio 110,000 Current assets Current liabilities 13,000 Current ratio 8.46 Quick ratio Working capital Inventory 97,000 Adjusted working capital Adjusted COGS (FIFO) Adjusted gross profit (FIFO) COGS Gross profit 2014 Cat&Rest SA Sales Foodilicious Ine Sales Accounts receivable (net) Inventory turnover (adjusted) Days of inventory on hand (adjusted) Accounts receivable turnover 2016 2015 2013 2016 2015 2014 2013 Accounts receivable (net) Inventory turnover Days of inventory on hand Accounts receivable turnover Average collection in number of days Average collection in number of days Foodilicious Inc. Sales growth Inventory growth 2016 2015 2014 Cat&Rest SA 2016 2014 2015 Sales growth Inventory growth Foodilicious Ine. Cat& Rest SA (in thousand USD) 2016 2015 2014 2013 (in thousand USD) 2015 2014 2016 2013 24,000 29,000 6,000 54,000 19,000 25,000 22,000 56,000 20,000 18,000 16.000 52,000 18,000 16,000 50,000 17,000 Cash and marketable securities 23,000 28,000 Cash and marketable securities Accounts receivable Prepaid expenses Inventory (LIFO) Equipment Buildings Intangibles 30,000 27,000 Accounts receivable Prepaid expenses Inventory (FIFO) Equipment Buildings Intangibles 5,000 7,000 8,000 17,000 15,000 40,500 34,000 37,000 150,000 240,000 400,000 14,000 12,000 10,000 90,000 40,600 105,000 120,000 90,000 15,000 90,000 15,000 40,000 120,000 135,000 90,000 200,000 400,000 15,000 40,000 160,000 15,000 400,000 400,000 40.000 40,000 Accounts payable Accounts payable Short-term loan payable Long-term loan payable Common stoc k Retained earnings 42,000 44,000 24,000 216,000 350,000 193,000 40,000 46,000 7,000 8,000 9,000 10,000 24,000 192,000 350,000 6,000 24,000 24,000 24,000 Short-term loan payable 6,000 6,000 12,000 6,000 168,000 240,000 Long-term loan payable 18,000 30,000 350,000 224,000 350,000 Common stock 180,000 180,000 180,000 180,000 143,600 171,500 Retained earnings 50,000 37,000 24,000 11,000 LIFO reserve COGS Gross profit 5,000 4,800 3,700 4,400 LIFO reserve 130,000 91,000 140,000 125,000 137,000 COGS 121,000 120,000 119,000 118,000 98,000 87,500 95,900 Gross profit 98,000 97,000 96,000 95,000 Foodilicious Inc. (in thousand USD) 2013 Cat&Rest SA (in thousand USD) 2016 2015 2014 2016 2015 2014 2013 BEFORE adjustments Current assets Current liabilities Current ratio Quick ratio Working capital Inventory COGS Gross profit AFTER adjustments Adjusted inventory (FIFO) Adjusted current assets Current liabilities Adjusted current ratio Adjustred quick ratio 110,000 Current assets Current liabilities 13,000 Current ratio 8.46 Quick ratio Working capital Inventory 97,000 Adjusted working capital Adjusted COGS (FIFO) Adjusted gross profit (FIFO) COGS Gross profit 2014 Cat&Rest SA Sales Foodilicious Ine Sales Accounts receivable (net) Inventory turnover (adjusted) Days of inventory on hand (adjusted) Accounts receivable turnover 2016 2015 2013 2016 2015 2014 2013 Accounts receivable (net) Inventory turnover Days of inventory on hand Accounts receivable turnover Average collection in number of days Average collection in number of days Foodilicious Inc. Sales growth Inventory growth 2016 2015 2014 Cat&Rest SA 2016 2014 2015 Sales growth Inventory growth

Answer rating: 100% (QA)

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