In your position as controller of Tropical Trade Company, you have the responsibility of keeping the board of directors informed about the financial activities and status of the company. In preparation for the next meeting of the board, you have calculated the following ratios, turnovers, and percentages to enable you to answer questions:

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Using the statistics given, answer each of the following questions and explain how you arrived at your answer.
1. Is it becoming easier for the company to meet its current debts on time and to take advantage of cash discounts?
2. Is the company collecting its accounts receivable more rapidly?
3. Is the company's investment in accounts receivable decreasing?
4. Are dollars invested in inventory increasing?
5. Is the company's investment in plant assets increasing?
6. Is the stockholders' investment becoming more profitable?
7. Is the company using its assets efficiently?
8. Did the dollar amount of selling expenses decrease during the three-year period?
Provocative Problem 16-3 Lodestar and Cosmos (L.O. 3)

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Current ratio Acid-test ratio Merchandise turnover Accounts receivable turnover. Return on stockholders' equity Profit margin Total asset turnover Return on total assets 1991 2.5 to 1 0.9 to 1 8.3 times 7.5 times 10.50% 3.4% 2.9 1990 2.4 to 1 1.2 to 1 9.5 times 8.1 times 12.25% 3.6% 3.0 10.8% 9.9% Sales to plant assets. 4.1 to 1 Sales trend. 136.00 3.8 to 1 124.00 Selling expenses to net sales. 10.2% 15.4% 1989 1.9 to 1 1.3 to 1 10.4 times 8.9 times 12.75% 3.8% 3.1. 11.8% 3.5 to 1 100.00 16.8%