A$.$ Use year$-$end data to calculate the current ratio, the quick ratio, and the net working capital $($NWC$)$ to total assets ratio for $2015$ and $2016$ for the Castillo Company. Explain what these changes might suggest.

B$.$ Use Castillo$$s complete income statement data and the changes in balance sheet items between $2015$ and $2016$ to determine the firm$$s cash build and cash burn for $2016.$ Did Castillo have a net cash build or net cash burn for $2016?$

C$.$ Convert the annual cash build and cash burn amounts calculated in Part B to monthly cash build and cash burn rates. Also indicate the amount of the net monthly cash build or cash burn rate. The Castillo Products Company was started in $2014.$ The company manufactures components for personal decision assistant $($PDA$)$ products and for other hand$-$held electronic products. A difficult operating year $2015$ was followed by a profitable $2016.$ However, the founders $($Cindy and Rob Castillo$)$ are still concerned about the venture's liquidity position and the amount of cash being used to operate the firm. Following are income statements and balance sheets for the Castillo Products Company for $2015$ and $2016.$

CASTILLO PRODUCTS COMPANY

$\backslash$table$[[$Income Statement,$2015\_,2016\_],[$Net Sales,$$900,000,$$$1,500,000],[$Cost of Goods Sold,$540,000\_,900,000\_],[,$ Gross Profit,$360,000,600,000],[$Marketing$,90,000,150,000],[$General & Administrative $\_,250,000,250,000],[$Depreciation$,40,000\_,40,000\_],[,$ EBIT,$-20,000,160,000],[$Interest$,45,000,60,000\_],[,$ Earnings Before Taxes,$-65,000,100,000],[$Income Taxes,$0\_,25,000\_],[,$ Net Income $($Loss$),-$$$\backslash$bar $($$$65,000),$$$75,000]]$

$\backslash$table$[[$Balance Sheet,$2015,2016],[\backslash$bar $($ Cash $),$$$55,000,$$$20,000],[$Accounts Receivables,$200,000,280,000],[$Inventories$,400,000\_,500,000\_],[$Total Current Assets,$655,000,800,000],[$Gross Fixed Assets,$450,000,540,000],[$Accumulated Depreciatior,$-100,000\_,-140,000\_],[$Net Fixed Assets,$350,000,400,000],[$Total Assets,$$1,005,000,$$$1,200,000],[$Accounts Payable,$$135,000,$$$160,000],[$Accruals$,50,000,70,000],[$Bank Loan,$90,000,100,000],[$Total Current Liabilities,$275,000,330,000],[$Long$-$Term Debt,$300,000,400,000],[$Common Stock $($ $$\mathrm{.}05$par$),150,000,150,000],[$Additional Paid$-$in$-$Capital,$200,000,200,000],[$Retained Earnings,$80,000,120,000\_],[$Total Liab & Equity,$$1,005,000,$$$1,200,000]]$

A$.$ Use year$-$end data to calculate the current ratio, the quick ratio, and the net working capital $($NWC$)$ to total assets ratio for $2015$ and $2016$ for the Castillo Company. Explain what these changes might suggest.