PANEL A. FAILED COMPANIES Years before failure Financial item 5 4 3 2 1 Statement of...

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PANEL A. FAILED COMPANIES Years before failure Financial item 5 4 3 2 1 Statement of financial position data 1. Cash and marketable securities 753 1 020 730 511 329 2. Accounts receivable 1 845 3 164 3 563 2 359 2 090 3. Inventories 4. Other assets 5. Total assets 6. Current liabilities 2 827 6 064 7 390 2 525 2 378 3 937 7 018 8 332 5 107 5 229 9 362 17 266 20 015 10 502 10 026 3 780 4 820 8 092 6 102 6 860 7. Other liabilities 2 149 8 617 9 784 3 537 3 408 8. Equity 3 433 3 829 2 139 863 -242 9. Liabilities and equity 9 362 17 266 20 015 10 502 10 026 Statement of comprehensive income and cash flow data 10. Sales 16 508 15 425 18 259 16 656 16 938 11. Net income 65 -29 -664 -858 -1 309 12. Cash flow 145 308 -244 -518 -909 8 PANEL B. NON-FAILED COMPANIES Financial item Statement of financial position data 5 Years before failure 4 3 2 1 1. Cash and marketable securities 2. Accounts receivable 3. Inventories 4. Other assets 981 1 086 1 107 1 304 1365 1 716 1 730 1 837 2 146 2 358 3 022 3 000 3 006 3 479 3 974 3 678 3.995 4 225 5 243 5565 5. Total assets 9 397 9 811 10 175 12 172 13 262 6. Current liabilities 2 023 2 251 2 370 2 920 3 305 7. Other liabilities 2 169 2 432 2 479 2826 3 800 8. Equity 5 205 5 128 5 326 6426 6 157 9. Liabilities and equity 9 397 9 811 10 175 12 172 13 262 Statement of comprehensive income and cash flow data 10. Sales 16 989 16 395 17 610 20 445 22 426 11. Net income 206 46 211 426 480 12. Cash flow 523 381 577 865 941 REQUIRED: 1) Use the data in Panel A and Panel B to present the following ratios in graphical format for the failed and non-failed companies: " Current ratio " Acid test/Quick ratio " Debt ratio " Net profit percentage Total asset turnover ratio 2) Briefly discuss which financial ratios exhibit the most differential behaviour for the failed and non-failed companies in the five-year period prior to failure? PANEL A. FAILED COMPANIES Years before failure Financial item 5 4 3 2 1 Statement of financial position data 1. Cash and marketable securities 753 1 020 730 511 329 2. Accounts receivable 1 845 3 164 3 563 2 359 2 090 3. Inventories 4. Other assets 5. Total assets 6. Current liabilities 2 827 6 064 7 390 2 525 2 378 3 937 7 018 8 332 5 107 5 229 9 362 17 266 20 015 10 502 10 026 3 780 4 820 8 092 6 102 6 860 7. Other liabilities 2 149 8 617 9 784 3 537 3 408 8. Equity 3 433 3 829 2 139 863 -242 9. Liabilities and equity 9 362 17 266 20 015 10 502 10 026 Statement of comprehensive income and cash flow data 10. Sales 16 508 15 425 18 259 16 656 16 938 11. Net income 65 -29 -664 -858 -1 309 12. Cash flow 145 308 -244 -518 -909 8 PANEL B. NON-FAILED COMPANIES Financial item Statement of financial position data 5 Years before failure 4 3 2 1 1. Cash and marketable securities 2. Accounts receivable 3. Inventories 4. Other assets 981 1 086 1 107 1 304 1365 1 716 1 730 1 837 2 146 2 358 3 022 3 000 3 006 3 479 3 974 3 678 3.995 4 225 5 243 5565 5. Total assets 9 397 9 811 10 175 12 172 13 262 6. Current liabilities 2 023 2 251 2 370 2 920 3 305 7. Other liabilities 2 169 2 432 2 479 2826 3 800 8. Equity 5 205 5 128 5 326 6426 6 157 9. Liabilities and equity 9 397 9 811 10 175 12 172 13 262 Statement of comprehensive income and cash flow data 10. Sales 16 989 16 395 17 610 20 445 22 426 11. Net income 206 46 211 426 480 12. Cash flow 523 381 577 865 941 REQUIRED: 1) Use the data in Panel A and Panel B to present the following ratios in graphical format for the failed and non-failed companies: " Current ratio " Acid test/Quick ratio " Debt ratio " Net profit percentage Total asset turnover ratio 2) Briefly discuss which financial ratios exhibit the most differential behaviour for the failed and non-failed companies in the five-year period prior to failure?