Hurstwood Wineries Ltd. (Hurstwood) produces and markets wines from its vineyards in Ontario and B.C. You have been provided with the following income statements and balance sheets for Hurstwood:

Required:
a. Compute the following ratios and amounts for Hurstwood for 2017 and 2016:
i. Gross margin percentage
ii. Profit margin percentage
iii. Earnings per share
iv. Working capital
v. Current ratio
vi. Quick ratio
vii. Debt-to-equity ratio
viii. Interest coverage ratio
ix. Dividend payout ratio
b. Compute the following ratios and amounts for Hurstwood for 2017:
i. Asset turnover
ii. Return on equity
iii. Return on assets
iv. Inventory turnover ratio
v. Average number of days inventory on hand
vi. Accounts receivable turnover ratio
vii. Average collection period of accounts receivable
viii. Accounts payable turnover ratio
ix. Average payment period for accounts payable
x. Cash lag
c. How do the unusual items reported on the 2017 and 2016 income statements affect your ability to predict Hurstwood€™s future performance?
d. Comment on Hurstwood€™s liquidity, based on amounts you calculated in (a) and
(b). Be sure to consider the nature of Hurstwood€™s business in yourresponse.

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Hurstwood Wineries Ltd. Income Statements For the Years Ended March 31 in thousands of dollars) 2016 $86,865 54,816 32,049 21,294 10,755 1,563 2,481 6,7 4,739 11,450 2017 S87,333 55,463 31,870 22,561 9,309 1,435 2,700 174 667) 4,507 Sales Cost of goods sold Gross profit Selling and administration Earnings before interest and amortization Interest Depreciation Earnings before unusual items Unusual items Earnings before income taxes Provision for Irecovery of) income taxes Current Future 2,168 (295) 1,873 2,634 39,395 1,928 S40,101 3,634 4,097 Net earnings for the year Retained earnings- beginning of year Dividends on common shares Retained eamings-end of year 33,970 1,928 $39,395 Hurstwood Wineries Ltd. Balance Sheets As of March 31 (in thousands of dollars) 2017 2016 Assets Current assets $ 7,844 31,241 557 39,642 38,844 3,565 $82,051 Accounts receivable Inventories Prepaid expenses S 7,542 30,736 702 38,980 43,884 3,565 S86,429 Capital assets and goodwill Investment Liabilities Current liabilities: Bank indebtedness Accounts payable and accrued liabilities Dividends payable Income and other taxes payable Current portion of long-term debt S17,883 8,548 482 928 1,552 $13,665 6,862 482 2,009 1,370 29,393 11,346 2,716 43,455 24,388 12,384 3,011 39,783 Long-term debt Future income taxes Shareholders' equity Common shares (weighted-average number of shares outstanding during 2017 was 3,953,050 and during 2016 was 3,875,200) Retained earnings 2,873 39,395 42,974 42 68 $82,051 2,873 40,101 S86,429