Final answer:
Washington Company's financial analysis indicates efficient cash collection due to lower accounts receivable, potential liquidity concerns from increased accounts payable, potential overstocking due to higher inventory levels, and a healthy gross margin as inferred from sales and cost of goods sold figures.
Step-by-step explanation:
The financial performance and position of Washington Company can be inferred by analyzing changes in its accounts receivable, accounts payable, inventory, sales, and cost of goods sold. A decrease in accounts receivable from $14,955 to $8,337 suggests the company has been efficient in collecting cash from customers, which is positive for cash flow. However, accounts payable increased from $4,244 to $9,723, indicating that the company may be taking longer to pay suppliers or is purchasing more on credit, which can be a liquidity concern if not managed properly.
The inventory levels raised from $10,297 to $15,890 over the year, which could imply either a build-up in anticipation of increased sales or potential overstocking, which might lead to increased holding costs. Sales for the year amounted to $74,633, and cost of goods sold was $31,762, resulting in a gross margin that highlights the profitability of the company before accounting for other operating expenses. All these elements need to be analyzed in the context of the overall industry and economic environment to make a comprehensive assessment of the company's health.