Financial information for Messersmith Company is presented below. MESSERSMITH COMPANY Balance Sheets December 31 Assets 2017 2016 Cash $ 77,000 $ 71,500 Short-term investments 57,200 44,000 Accounts receivable (net) 107,800 88,000 Inventory 137,500 148,500 Prepaid expenses 31,900 25,300 Land 143,000 143,000 Building and equipment (net) 198,000 192,500 $752,400 $712,800 Liabilities and Stockholders Equity Notes payable $110,000 $110,000 Accounts payable 52,800 46,200 Accrued liabilities 55,000 44,000 Bonds payable, due 2020 165,000 165,000 Common stock, $10 par 220,000 220,000 Retained earnings 149,600 127,600 $752,400 $712,800 MESSERSMITH COMPANY Income Statement For the Years Ended December 31 2017 2016 Net sales $935,000 $869,000 Cost of goods sold 682,000 632,500 Gross profit 253,000 236,500 Operating expenses 205,700 190,300 Net income $ 47,300 $ 46,200 Additional information: 1. Inventory at the beginning of 2016 was $129,800. 2. Total assets at the beginning of 2016 were $693,000. 3. No common stock transactions occurred during 2016 or 2017. 4. All sales were on account. Accounts receivable, net at the beginning of 2016 were $96,800. 5. Notes payable are classified as current liabilities. Collapse question part (a) Correct answer. Your answer is correct. Indicate, by using ratios, the change in liquidity and profitability of Messersmith Company from 2016 to 2017

Financial information for Messersmith Company is presented below MESSERSMITH COMPANY Balance Sheets 31 2017 2016 Assets Cash Short-term investments Accounts receivable (net) Inventory Prepaid expenses Land Building and equipment (net) $ 77,000 $ 71,500 57,200 44,000 107,800 88,000 137,500 148,500 31,900 25,300 143,000 143,000 198,000 192,500 $752,400 $712,800 Liabilities and Stockholders Equi Notes payable $110,000 $110,000 Accounts payable Accrued liabilities 52,800 46,200 55,000 44,000 Bonds payable, 165,000 165,000 due 2020 Common stock, $10 par Retained earnings 220,000 220,000 149,600 127,600 $752,400 $712,800 MESSERSMITH COMPANY Income Statement For the Years Ended December 31 2017 2016 Net sales $935,000 $869,000 Cost of goods sold Gross profit 682,000 632,500 253,000 236,500 Pera205,700 190,300 expenses Net income $47,300 $46,200 Additional information: 1. Inventory at the beginning of 2016 was $129,800 2. Total assets at the beginning of 2016 were $693,000 3. No common stock transactions occurred during 2016 or 2017. 4. All sales were on account. Accounts receivable, net at the beginning of 2016 were $96,800 5. Notes payable are classified as current liabilities