A Data Table 2015 Selected balance sheet data Cash 3,100 3,200 Marketable securities... Accounts receivable, net..... Inventory Total current assets......... Long-term assets Total assets Accounts payable.......... Short-term notes payable... Total current liabilities Total long-term liabilities ...... 2018 3,200 $ 600 7,100 6,100 17,000 7,400 24,400 3,400 7,900 11,300 465 2017 3,700 $ 800 6,400 4,600 15,500 9,200 24,700 2,300 6,700 9,100 3,275 2016 4,700 400 4,400 $ 3,600 13,100 10,500 23,600 2,000 6,350 7,900 7,894 2.800 Print Done i Data Table Furniture industry averages 76.1 35.4 Current ratio......... Quick ratio Days' inventory outstanding ...... Days' sales outstanding. Days' payable outstanding .......... Debt ratio Times-interest-earned ratio.... Gross margin percentage Operating income percentage 39.6 64% 40.4 58% 21% Print Done - i Data Table 2015 41,900 Selected income statement data Net sales revenue (assume all sales are credit sales).. $ Cost of goods sold... Operating expenses Interest expense......... Income taxes 2018 2017 43,700 $ 43,000 $ 22,600 18,790 13,500 14,900 205 220 410 1,081 2016 42,300 $ 16,970 15,400 325 1.180 Print Done Requirement 1. Perform a trend analysis on Trotman's sales revenue, inventory, and receivables over the past three years, using 2015 as the base. Is the trend in each of these areas favorable or unfavorable for the company? Begin by calculating the trend analysis. (Round the ratios to the nearest whole percent, X%.) 2018 2017 2016 2015 % % % % Net sales revenue Inventory Accounts receivable, net % % Is the trend in each of these areas favorable or unfavorable for the company? The trend percentages for sales revenue is the trend percentage in inventory indicates a The trend percentage in net receivables is than the increase in sales, which is trend. Requirement 2. Using the industry averages as benchmarks, analyze Trotman's performance over the past three years in the following areas: a) liquidity, b) turnover, c) overall debt payment ability, and d) profitability. a. Start by analyzing the liquidity ratios: the current ratio and the quick ratio. Select the formula and enter the amounts to calculate the current ratios for the years 2016 through 2018. (Round the ratios to two decimal places, X.XX.) 1 = Current ratio 2018 2017 2016 Next, select the formula and enter the amounts to calculate the quick (acid-test) ratios for the years 2016 through 2018. (Abbreviations used: Cash* = cash and cash equivalents, SE = stockholders' equity, and ST = short-term. Round the ratios to two decimal places, X.XX.) = Quick ratio 2018 ( 2017 ( 2016 ( + + + + b. Analyze the turnover ratios: inventory turnover and days' inventory outstanding, accounts receivable turnover, days' sales outstanding, accounts payable turnover, days' payables outstanding, and cash conversion cycle Select the formula and enter the amounts to calculate the inventory turnover for the years 2016 through 2018. (Round the ratios to two decimal places, X.XX.) = Inventory turnover 2018 2017 2016 Select the formula and enter the amounts to calculate days' inventory outanding (DIO) for the years 2016 through 2018. (Enter formula ratios to two decimal places, X.XX. Use a 365-day year. Round the DIO to one decimal place, X.X.) = Days inventory outstanding (DIO) 2018 2017 2016 Select the formula and enter the amounts to calculate the accounts receivable turnover for the years 2016 through 2018. (Round the ratios to two decimal places, X.XX.) = Accounts receivable turnover 2018 2017 2016 Select the formula and enter the amounts to calculate days' sales outanding (DSO) for the years 2016 through 2018. (Use a 365-day year. Round the DSO to one decimal place, X.X.) = Days' sales outstanding (DSO) 2018 2017 2016 Select the formula and enter the amounts to calculate the accounts payable turnover for the years 2016 through 2018. (Round the ratios to two decimal places, X.XX.) = Accounts payable turnover 2018 2017 2016 Select the formula and enter the amounts to calculate days' payables outanding (DPO) for the years 2016 through 2018. (Use a 365-day year. Round the DPO to one decimal place, X.X.) = Days' payables outstanding (DPO) 2018 2017 2016 - + Select the formula and enter the amounts to calculate the cash conversion cycle (in days) for the years 2016 through 2018. (Enter all amounts to one decimal place, XX.) = Cash conversion cycle 2018 2017 2016 + + + c. Analyze the ability to pay long-term debt: debt ratio and times-interest-earned ratio. Select the formula and enter the amounts to calculate the debt ratios for the years 2016 through 2018. (Enter the ratios in decimal form (not as pe = Debt ratio 2018 2017 2016 Select the formula and enter the amounts to calculate the times-interest-earned ratios for the years 2016 through 2018. (Round the ratios to one = Times-interest-earned ratio 2018 2017 2016 d. Analyze the profitability ratios: gross margin percentage and operating income percentage. Select the formula and enter the amounts to calculate the gross margin (gross profit) percentages for the years 2016 through 2018. (Round the Gross margin % 2018 2017 2016 % Select the formula and enter the amounts to calculate the operating income percentage percentages for the years 2016 through 2018. (Round th = Operating income % 2018 2017 2016 Trotman's performance over the past three years are due to: (Select all that apply.) A. Declining earnings B. Operating income percentages are decreasing C. Improved interest coverage D. Inability to collect accounts receivable O E. Buildup of inventories OF. Improved accounts receivable turnover O G. Increasing long-term liabilities I H. Decreasing gross margin 1. Decreased cash flow J. Increasing debt ratio OK. Payment of accounts payable is getting faster Requirement 3. Evaluate Trotman's quality of earnings. Are there any red flags in your analysis? Explain. First, select the formula and enter the amounts to calculate the net income percentage ratios for years 2016 through 2018. (Round the ratios to one-tenth percent, X.X%.) = Net income % 2018 2017 2016