Avenger Corporations balance sheet and income statement is listed below.

Balance Sheet	This Year	Last Year
Cash	50,000	40,000
Accounts receivable	80,000	60,000
Inventories	180,000	110,000
Plant & equipment	300,000	260,000
Less accumulated depreciation	-40,000	-20,000
Total assets	570,000	450,000
Accounts payable	100,000	150,000
Accrued liabilities	70,000	50,000
Mortgage payable	80,000	---
Common stock	130,000	90,000
Retained earnings	190,000	160,000
Total liabilities and equity	570,000	450,000

Income Statement	This Year	Last Year
Net Sales	680,000	600,000
Cost of goods sold	410,000	330,000
Gross profit	270,000	270,000
Operating expenses	190,000	192,000
Operating income	80,000	78,000
Interest expense	7,000	2,000
Profit before taxes	73,000	76,000
Taxes	22,000	22,800
Net income	51,000	53,200

Other data:

• Cash dividends paid this year were P21,000.

• The change in accumulated depreciation account is the depreciation for the year.

1. Prepare a horizontal analysis of Avengers balance sheet in good form. Show the change in amount and percentage change, rounding percentages to two decimal place.

2. Prepare a vertical analysis of Avengers income statement and reconcile the retained earnings account. Round percentages to two decimal places.

3. Prepare a common-size income statement of Avengers and reconcile the retained earnings account. Round percentages to two decimal places.

4. Prepare a common-size balance sheet of Avengers and reconcile the retained earnings account. Round percentages to two decimal places.

5. Based on the financial statements prepared, calculate the (a) Current ratio (b) Quick ratio (c) Debt ratio (d) Gross profit ratio (e) Inventory Turnover ratio (f) Accounts Receivable turnover (g) Days sales outstanding (h) Days sales in inventory.

6. Based upon your answers to parts (1) through (4) would you provide a credit line to this company? Support your decision by reference to your work in parts (1) through (4).