1. Based on the information below, provide a liquidity

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.