Question

What evidence of underperformance do you see in your analysis of the financial statements for Bob’s and is this suggestive that the management team is doing poorly?

	2016		2017	2018	2019	2020
Revenue		191	186	210	248	272
Cost of Goods Sold		137	136	157	189	212
Gross Profit		54	50	53	59	60
Selling and General Expenses		19	29	38	48	47
Operating Profit		35	21	15	12	13
Net Interest Expense		1	0	7	6	6
Pretax Profit		34	21	8	5	7
Taxes		8	5	2	1	2
Net Profit		26	16	6	4	5
Cash and Cash Equivalents		11	10	11	10	9
Accounts Receivable		10	10	10	14	15
Inventory		7	8	8	11	12
Other Current Assets		4	3	5	7	8
Current Assets		31	30	34	42	43
Net Property, Plant, and Equipment		92	90	264	276	289
Other Fixed Assets		47	48	49	47	50
Total Assets		170	168	347	364	382
Accounts Payable		12	13	15	14	12
Wages Payable		12	14	14	14	15
Other Payables		8	8	6	7	8
Current Liabilities		33	36	35	35	36
Debt		30	9	183	196	208
Shareholders’ Equity		108	123	129	133	139
Total Liabilities and Shareholders’ Equity		170	168	347	364	382

Answer 1