Financial Information for Mexicalli Company is presented below.

MEXICALLI COMPANY Balance Sheets December 31

Assets 20X3 20X2 Cash $70,000 $65,000

Short-term investments 45,000 40,000

Receivables (net) 94,000 90,000

Inventories 130,000 125,000

Prepaid expenses 25,000 23,000

Land 130,000 130,000

Building and equipment (net) 190,000 175,000

TOTAL ASSETS $684,000 $648,000

Liabilities and Stockholders' Equity Notes payable $100,000 $100,000

Accounts payable 45,000 42,000 Accrued liabilities 40,000 40,000

Bonds payable, due 2006 150,000 150,000

Common stock, $10 par 200,000 200,000

Retained earnings 149,000 116,000

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $684,000 $648,000

MEXICALLI COMPANY Income Statements For the Years Ended December 31 20X3 20X2

Sales $850,000 $790,000

Cost of goods sold 620,000 575,000

Gross profit 230,000 215,000

Operating Expenses 194,000 180,000

Net income $36,000 $35,000

Additional information: 1. Inventory at the beginning of 20X2 was $115,000. 2. Receivables at the beginning of 20X2 were $88,000. 3. Total assets at the beginning of 20X2 were $630,000. 4. Total stockholders' equity at the beginning of 20X2 was $283.000. 5. No common stock transactions occurred during 20X2 or 20X3. 6. All sales were on account. Instructions: 1. Calculate the following ratios for 20X3 and 20X2.

For each ratio highlight, in bold letters, the better one for each year. Round to THREE decimal places. SHOW ALL WORK

a. Liquidity Ratios: 1). Current Ratio = 20X3 = 20X2 = 2). Quick Ratio = 20X3 = 20X2 = 3). Receivable Turnover = 20X3 = 20X2 = 4). Average Days' Sales Uncollected = 20X3 = 20X2 = 5). Inventory Turnover = 20X3 = 20X2 = 6). Average Days' Inventory on Hand = 20X3 = 20X2 = 7). Operating Cycle = 20X3 = 20X2 = b. Profitability Ratios: 1). Profit Margin = 20X3 = 20X2 = 2). Asset Turnover = 20X3 = 20X2 = 3). Return on Assets = 20X3 = 20X2 = 4). Return on Equity = 20X3 = 20X2 = c. Long-Term Solvency Ratio: 1). Debt to Equity Ratio = 20X3 = 20X2 =