Question 9 of 20 -/7 E View Policies Current Attempt in Progress Hope Corporation had the following comparative current assets and current liabilities for the years ended December 31, 2019 and 2020: 2020 2019 Current assets Cash $22,500 $29,500 Short-term investments 16,600 24,600 Accounts receivable 72,000 95,000 Inventory 167,000 89,600 Prepaid expenses 10,800 13,800 Total current assets $288.900 $252,500 Total non-current assets $452,000 $385,000 Current liabilities Accounts payable $173,800 $140,000 Salaries payable 13,600 24,500 Income tax payable 15,800 14,400 Total current liabilities $203,200 $178,900 Total non-current liabilities $370,000 $310.000 During 2020, credit sales and cost of goods sold were $450,000 and $242,000 respectively. The 2019 credit sales were $493,000 and cost of goods sold was $260,000. Net cash provided by operating activities was $138,600 and $141,400 respectively for 2020 and 2019. At December 31, 2018, current liabilities were $187,400, accounts receivable was $69,400 and inventory was $89,800. The allowance for doubtful accounts at the end of each of the three years was zero. Industry Averages: Working capital $38,500 Current ratio: 1.20: 1 Quick ratio: 0.65:1 Receivables average collection period: 30 days Days to sell inventory: 120 days Using retrospective (horizontal) analysis, calculate the percentage of base-year amount for 2019 to 2020, assuming that 2019 is the base year. (Round answers to 1 decimal place, e.g. 15.2%.) 2020 2019 Current assets Cash % % Short-term investments % % Accounts receivable % % Inventory % % Prepaid expenses % % Current liabilities Accounts payable % % Salaries payable % % Income Tax Payable % % Calculate the following liquidity measures for 2019 and 2020: (Round quick ratio to 2 decimal places, e.g. 1.25. Round current ratio, accounts receivable turnover and inventory turnover to 1 decimal place, e.g. 15.2. Round receivables average collection period and days to sell inventory to O decimal places, e.g. 125. Use 365 days for calculation.) 2020 2019 (1) Working capital $ $ (2) Current ratio :1 :1 (3) Quick ratio :1 : 1 (4a) Accounts receivables turnover times times (4b) Receivables average collection period days days (5a) Inventory turnover times times (5b) Days to sell inventory days days Calculate the net debt as a percentage of total capitalization solvency measure for 2019 and 2020. (Round answers to 1 decimal place, e.g. 15.2%.) 2020 2019 Net debt as a percentage of total capitalization % %
