Company Background: Mother Nature Products operates a natural product manufacturing and sales business. The Company's primary activity is selling natural and homeopathic products, as well as research and development of botanical-based products. Calculate the following in the cells indicated (boxed). Current ratio 2018 L 2 .26 Current ratio 2017 0.68 A/R Turnover 2018 (in days) These turnover ratios will require long formulas so be careful with the logic you create Inventory turnover 2018 (in days) 24 Gross profit margin 2018 Gross profit margin 2017 46% Debt to total assets 2018 0.45 0.45 Answer the following four questions in the spaces provided. Be concise and adhere to the character limits provided. Remember that you need to explicitly relate the calculations above to your analysis and responses. Do not change font size or type. Does Mother Nature Products have healthy liquidity? Is it improving or deteriorating? (425 character limit) What is your assessment of the company's turnover ratios? What risks do they face? Remember to consider the industry they operate in. (425 character limit) Using the financial statements as a whole, and any of the ratios to support your answer, identify two things the company can do to improve performance in one of the following areas: liquidity, solvency or profitability. (425 character limit) Would this be a good time to invest in Mother Nature Products? Why or why not? (425 character limit) oma Mother Nature Products Statement of Operations (Expressed in Canadian dollars) Year ended Year ended November 30, 2018 November 30, 2017 Net Sales Cost of goods sold Gross margin 536,659 (257,440) 279,219 141,253 (76,961) 64,292 D300S) DDS Sales expenses Salaries and payroll expenses Commissions Travelling costs Advertising and promotion Other expenses Total sales expenses 80,233 62,332 7,162 35,734 23,502 208,963 18,349 10,139 427 48,418 4,688 82,021 Administrative costs Rent Repair and maintenance Office costs Management fees Professional fees Consulting fees Research and development Depreciation 33,760 5,205 78,777 133,276 247,009 1,976 23,375 11,529 8.922 5,099 7,888 72,167 112,777 2,327 Total administrative expenses 534,907 2 09,180 Finance costs Interest and bank charges Credit card fees Total finance costs 38,116 2,011 40,127 13,867 662 14,529 Other expenses Company restructuring costs 969,451 Net loss 969,451 (1,474,229) (241,438) Mother Nature Products Statement of Changes in Shareholders' Equity (Expressed in Canadian dollars) bobna bobno STOS O dovoMBTOS. Y Common shares 569,990 2,234,166 Preferred shares 153,000 Deficit (534,576) Total 188,414 2,234,166 (1,474,229) (1,474,229) legs Balance, November 30, 2017 Shares issued O es Net Loss eisen Dividends Balance, November 30, 2018 ero sal. 2.804,156 153,000 (2,008,805) 948,351 SHOES 28209 Mother Nature Products Statement of Financial Position (Expressed in Canadian dollars) As at November 30, November 30, ASSETS 110.281 Current assets Cash Accounts receivable Prepaids Inventory Total current assets 75.353 1,115,020 141,634 43,980 112,519 1,413,153 105.488 291,122 Non-current assets Land and building Equipment Other Total non-current assets 309,656 1.441 1,195 312 292 320,407 1.801 1.612 323,820 Total assets 1.725,445) 614,942 LIABILITIES Current liabilities Accounts payable Accrued liabilities Bank line of credit Bank loans Mortgage - current portion Total current liabilities 257,925 405 233,527 25,201 109,535 626,594 138,274 405 225,527 61,020 425 226 Non-current liabilities Mortgage Other Total non-current liabilities 150,000 500 150,500 Total liabilities) 777,094 426,528 SHAREHOLDERS' EQUITY Common shares Preferred shares Deficit 2,804,156 153,000 (2,008,805) 569,990 153,000 (534,576) Total equity 948,351 1 88,414 Total liabilities and shareholders' equity 1,725,445 614,942
