Cables & Wires Ltd Income Statements $CDN thousands For the year ended December 31 2019 2018 Sales revenue 1,970 1,680 Cost of goods sold 1,120 940 Gross profit 850 740 Less: Operating exp 470 410 Amortization 260 230 Total 730 640 Operating income 120 100 Less: Financing cost Income taxes Total Net income 25 25 40 35 65 60 55 40 2382 Cables and Wires Ltd. Balance Sheets $CDN thousands As at Dec 31 2019 2018 Assets Current assets Cash 20 5 Accounts receivable 170 135 Inventory 310 280 Prepaid expenses 60 40 Total current assets 560 460 Non-current assets Property, plant & equipment 640 480 Goodwill & other intangibles 940 910 Total non-current 1,580 1,390 Total assets 2,140 1,850 Liabilities & Shareholders' Equity Current liabilities Accounts payable Deferred revenue Total current liabilities 200 230 560 470 760 700 Long-term liabilities Bonds payable Total liabilities 680 500 1440 1200 Equity Share capital 40 40 Retained earnings 660 610 Total equity 700 650 Total liabil'ties & equity 2,140 1,850 REQUIRED EACH OF THE THREE QUESTIONS, A, B, AND C BELOW refer to the financial statements of Cables and Wires Ltd. Organize your answers according to the instructions (i), (ii) and (iii) that follow. The mark distribution for your answers is shown in the instructions. A. (17 marks) Compare the company's management of accounts receivable over the two years. B. (17 marks) Compare the company's success in generating a return for its shareholders over the two years. C. (17 marks) Compare the company's long-term risk over the two years. Instructions (i) Select the most appropriate ratio for the requested evaluation, explaining briefly why you have chosen it (3 marks). (ii) Using your chosen ratio, evaluate the company for each of the two years (2018 and 2019) (or year-ends) shown in the statements. Express ratios to 2 significant digits. (10 marks) (iii) On the basis of your evaluation for the two years, come to a clear conclusion as to whether the company's situation is improving, deteriorating or is unchanged (4 marks)