... than half of the accounts receivables were expected to be collected. Accounts payable was "over-stretched" and many suppliers cut CI off further credit. Short term liquidity was in jeopardy. Profitability ratio painted a pessimistic picture too. ROE and ROA both fell since 2001. Solvency ratios revealed that CI was undertaking too much leverage, increasing the risk of the company substantially. The outlook of the company was gloomy. In addition, the main source of cash inflow from was debt financing. Furthermore, there is a huge shortage of cash inflow and the recommended cash infusion of $3.9 million was insufficient to maintain company's operations. These problems were addressed with greater details in the subsequent part of the report Immediate steps have to be taken to prevent the company from going into bankurcptcy. Firstly, CI should try to inject cash into the firm. Thereafter, CI should concentrate on getting their customers back and then improving ...

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