P5-61A. (Learning Objectives 1, 7: Show how to speed up cash flow from receivables; evaluate liquidity using ratios) The comparative financial statements of Sunset Pools, Inc., for 2020, 2019 and 2018 included the following select data: (In millions) 2019 2018 $ 60 175 $ 40 110 2020 Balance sheet Current assets: Cash.... S 85 Investment in trading securities...... 160 Receivables, net of allowance for uncollectible accounts of $7, $6, and $4, respectively 270 Inventories 360 Prepaid expenses.... 60 Total current assets $ 935 Total current liabilities.. $ 620 Income statement Net sales (all on account) $7,685 260 335 45 $ 875 $ 635 240 320 70 $ 780 $ 670 $5,500 $5,110 Requirements 1. Compute the following ratios for 2020 and 2019: a. Current ratio b. Quick (acid-test) ratio c. Days' sales outstanding 2. Which ratios improved from 2019 to 2020 and which ratios deteriorated? Are each of the trends favorable or unfavorable? 3. Recommend two ways for Sunset Pools to improve cash flows from receivables