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Tables of Contents 1. Executive Summary 3 2. Introduction 4 3. Revised Financial Statements 4 4. Income Statement Analysis 6 a. Sales, COGS and Gross Profit 6 b. Selling and Administration Expense 7 c. Net Income 7 5. Balance Sheet Analysis 8 a. Accounts Receivables 8 b. Inventories 9 c. Plant, Property and Equipment 10 d. Accounts Payable 10 e. Retained earnings 11 6. Cash Flow Statement Analysis 11 7. Ratio Analysis 13 a. Liquidity Ratio 13 b. Profitability Ratio 13 c. Solvency Ratio 14 8. Recommendations 14 a. Short-Term recommendations 14 b. Medium-Term recommendations 15 9. Conclusion 16 10. Appendix 17 1. Executive Summary Cariboo Industrial (CI) Ltd was retail chain specializing in the sale of industrial equipment and supplies to commercial contractors in British Columbia and Alberta. It was successful 2000 - 2001. It had a good capital structure with moderate leverage. Revenue and net income were both high. Return on equity (ROE) as well as return on assets (ROA) was high too. Jack Venables was hired to manage CI in early 2001 when the owner Martha McMaster suffered a stroke. Since then, things went downhill for CI. Leverage began to increase and so did accounts payable. Large parcels of land were purchased above their market value. These problems intensified in year 2003. As compared to 2001, net income...

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