Question 3 [5 points] Use Zcom Inc.'s financial statements to compute the number of days of sales in inventory, and indicate whether the change from year to year is favourable or unfavourable. For your analysis, assume that all other things have remained constant. Apply your analysis in very general terms. All values should be accurate to at least two decimal places. Zcom Inc. Income Statement For Years Ended December 31, 2014, 2013, and 2012 2014 2013 2012 Sales $840,600 $869,200 $771,600 Cost of goods sold 393,400 327.400 313,800 Gross profit from sales 447,200 541,800 457,800 Operating expenses 289,500 243,100 211,800 Income from operations 157,700 298,700 246,000 Interest expense 6,400 5,600 5,300 Income before taxes 151,300 293,100 240,700 Income taxes 36,900 61,900 59,100 Net income $114,400 $231,200 $181,600 Zcom Inc. Balance Sheet December 31, 2014, 2013, and 2012 Assets 2014 2013 2012 Cash $133,400 $111,200 $99,900 Short-term investments 79,000 71,000 68,000 Accounts receivable, net 37,000 38,700 45,300 Merchandise inventory 15,800 18,200 18,800 Prepaid expenses 8,500 7,100 7,700 Notes receivable, due in 2017 9,000 8,000 7,500 Plant assets, net 293,000 326,000 362,000 Total assets $575,700 $580,200 $609,200 Liabilities and Equity Accounts payable $20,500 $20,600 $21,400 Salaries payable 15,700 19,200 16,600 Income taxes payable 16,350 18,150 17,350 Long-term note payable secured by mortgage on plant assets 152,000 128,000 127,000 Share capital, 100,000 shares 220,000 240,000 210,000 Retained earnings 151,150 154,250 216,850 Total liabilities and equity $575,700 $580,200 $609,200 2014 2013 Ratio Number of days of sales in inventory Analysis (select one) Analysis (select one) (select one) favourable unfavourable equal