Eco Play Ltd., with its head office in Vancouver, manufactures enviro-friendly, safe playground equipment for elementary schools. Its 2020 balance sheet and income statement follow.

Assume that the share capital is all common and that the weighted average number of shares outstanding in 2020 was 10,808,000.

Required

1. Prepare a common-size balance sheet and income statement on a comparative basis for 2019 and 2020. Identify any significant changes from 2019 to 2020. Round calculations to two decimal places.

2. Calculate the 2020 ratios for Eco Play by completing the schedule below, including a comparison against the industry averages in Exhibit 17.11. Round calculations to two decimal places.

Analysis Component: As part of its cash flow management strategy, assume Eco Play requires a current ratio of 2:1. Calculate Eco Play?s 2019 current ratio and explain the change from 2019 to 2020.

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Eco Play Ltd. Balance Sheet ($000) Eco Play Ltd. Income Statement ($000) For Years Ended December 31 As at December 31 2020 2019 2020 2019 $147,529 $138,185 Assets Net sales. $ 2,928 $4 Cash. 571 Cost of sales. 126,311 104,867 14,260 Trade and other receivables. 13,672 Gross Profit. 21,218 33,318 Sales and marketing expenses. Inventories. 31,794 24,961 14,721 13,697 Prepaid expenses Distribution expenses. 7,352 579 450 7,882 General and admin expenses. 6,410 Other current assets. 2,244 -0- 5,315 Property, plant, and equipment. 46,195 39,719 Operating Profit (Loss). Loss on disposal of property, plant, and equipment. (7,265) 6,424 Goodwill. 1,084 -0- -0- 57 $96,139 $82,318 Total assets. Interest expense. 714 142 Liabilities and Equlty Other revenues (expenses). (1,779) $ 4,503 2,349 Trade and other payables. $19,479 $18,061 Profit (loss. $ (5,687) Income taxes payable. Current loans. -0- 377 11,104 1,297 2,512 Other current liabilities. 639 Long-term loans. 14,458 5,189 Other long-term liabilities. 3,422 3,421 Share capital. 17,724 17,724 Contributed surplus. 794 794 Retained earnings. 27,914 33,601 Accumulated other comprehensive loss (53) $96,139 -0- Total liabilities and equity. $82,318 Favourable (F) or Unfavourable (U) Ratio Calculation Current ratio Accounts receivable turnover Inventory turnover. Accounts payable turnover. Debt ratio. Gross profit ratio. Return on total assets Earnings per share.