Question 715 pts Karanpreet Ltd. is a clothing designer, marketer, and distributor. The company reported the following in recent balance sheets:

September 30, 2020 December 31, 2019 Assets Current Assets: Cash $73,324 $ 92,962 Accounts Receivable 81,336 58,270 Inventories 25,816 20,440 Other Current Assets 5,512 5,002 Total Current Assets 185,988 176,674 Property, Equipment, and Other 54,128 25,820 Long-Term Assets Total Assets $ 240,116 $202,494 Liabilities and Shareholders Equity Current Liabilities: Accounts Payable $ 19,207 $ 18,694 Other Current Liabilities 12,880 10,633 Income Taxes Payable 3,512 Total Current Liabilities 35,599 29,327 Long-Term Liabilities 1,709 312 Shareholders Equity 202,808 172,855 Total Liabilities and Shareholders Equity $240,116 $202,494 Required:

Calculate the current ratio at September 30, 2020, and December 31, 2019. Did the companys current ratio increase or decrease? What does this imply about the companys ability to pay its current liabilities as they come due? What would Karanpreet Ltd.s current ratio have been if, on September 30, 2020, the company was to have paid down $10,000 of its Accounts Payable (hint: this impacts cash and AP)? Does paying down Accounts Payable in this case increase or decrease the current ratio (hint: recalculate the current ratio)? Are the companys total assets financed primarily by liabilities or shareholders equity on September 30, 2020? Assuming no dividends were paid and no additional shares were sold, did Karanpreet Ltd. make a profit or a loss in 2020? SHOW YOUR WORK.