Question 4 [5 points] Use Northstar Corp.'s financial statements to compute the gross profit ratio, 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. Northstar Corp Income Statement For Years Ended December 31, 2014, 2013, and 2012 2014 2013 2012 Sales $917,600 $1,045,000 $1,118,500 Cost of goods sold 368,900 440,600 440,700 Gross profit from sales 548,700 604,400 677,800 Operating expenses 185,000 194,300 227,500 Income from operations 363,700 410,100 450,300 Interest expense 1,200 1,050 950 Income before taxes 362,500 409,050 449,350 Income taxes 73,300 92,000 74,700 Net income $289,200 $317,050 $374,650 Northstar Corp. Balance Sheet December 31, 2014, 2013, and 2012 Assets 2014 2013 2012 Cash $24,800 $26,600 $25,800 Short-term investments 18,000 19,000 20,000 Accounts receivable, net 43,700 49,500 42,700 Merchandise inventory 93,000 92,000 77,200 Prepaid expenses 3,500 3,900 4,200 Notes receivable, due in 2017 6,000 6,500 8,000 Plant assets, net 362,000 337,000 288,000 Total assets $551,000 $534,500 $465,900 Liabilities and Equity Accounts payable $25,600 $32,000 $28,400 Salaries payable 8,500 8,700 7,500 Income taxes payable 43,550 39,500 45,200 Long-term note payable secured by mortgage on plant assets 174,000 193,000 162,000 Share capital, 50,000 shares 290,000 260,000 220,000 Retained earnings 9,350 1,300 2,800 Total liabilities and equity $551,000 $534,500 $465,900 2014 2013 Ratio Gross profit ratio (%) Analysis (select one) Analysis (select one) (select one) favourable unfavourable equal