2020 2. After learning that you are taking a hospitality management accounting course, Kim, your close friend, has come to ask you for investment advice. She went skiing at Rocky Alpine Retreat last winter and was so impressed by the resort that she has been thinking about investing in it. Because she doesn't know how to read financial statements, she asked you to analyze Rocky Alpine Retreat's financial statements and comment on the company's liquidity, profitability and leverage. The statements are presented below. Rocky Alpine Retreat Consolidated Balance Sheet (In thousands) As at September 30, 2020 and 2019 2019 Assets Cash $ 8,410 $ 41,353 Short-term investments 145 311 Har Snit Accounts receivable 4,496 3,323 Inventory 18,633 15,856 Prepaid expenses 3,985 2,727 Total Current Assets 35,669 63,570 Notes receivable 777 2,636 Property, buildings & equipment 319,897 322,316 Intangible assets 300,778 311,428 Total Assets $657,121 $699,950 Liabilities Accounts payable and accrued liabilities Income taxes payable Deferred revenue Total Current Liabilities Long-term debt Total Liabilities Shareholders' Equity Common shares Retained earnings (deficit) Total Shareholders' Equity Total Liabilities and Shareholders' Equity $27,854 2,403 27610 57,867 229,855 287,722 $27,785 1,645 22,347 51,777 258,042 309,819 443,348 173,949) 369,399 $657,121 444,912 (54.781) 390, 131 $699,950 Rocky Alpine Retreat Consolidated Income Statement (in thousands) For the Years Ended September 30, 2020 and 2019 2020 Resort Revenue $254,517 Operating expenses 134,081 Depreciation & amortization expenses 41,254 Selling, general& administrative expenses 27,761 Total Expenses 203,096 Income from Operations before Income Tax 51,421 Income tax expense 12,400 Net Income $39,021 2019 $240,780 126,673 40,249 27,673 194,595 46,185 16,200 $29.985 Rocky Alpine Retreat Summary of the Statement of Cash Flows (In thousands) For the Years Ended September 30, 2020 and 2019 2020 2019 Net cash provided by operating activities $81,413 $78,725 Net cash used by investing activities (26,416) (24,345) Net cash used by financing activities (87.940) (56,661) Net increase (decrease) in cash ($32.943) ($2.281) For the calculation that requires average shareholders' equity, Rocky Alpine Retreat's shareholders' equity balance at the end of 2018 was $479,340. Required a) Explain to Kim what a retained earnings deficit in Rocky Alpine Retreat's balance sheet means. Required a) Explain to Kim what a retained earnings deficit in Rocky Alpine Retreat's balance sheet means. ular Sni b. Assess Rocky Alpine Retreat's liquidity using relevant ratios and provide an explanation. C. Assess Rocky Alpine Retreat's profitability using relevant ratios and provide an explanation. d. Assess Rocky Alpine Retreat's leverage using the relevant ratio and provide an explanation