Question:

(Ratio analysis over time)

The following information comes from the accounting records of Hercep Ltd. for the first three years of its existence:

201820192020

Statement of Financial Position

Assets

Cash$22,500$19,600$27,900

Accounts receivable68,50056,000143,000

Inventory115,000143,000227,000

Capital assets (net)431,000463,000520,000

Other assets237,000207,000268,700

$874,000$888,600$1,186,600

Liabilities and equity

Accounts payable$116,000$58,000$116,000

Long-term debt210,000260,000520,000

Common shares518,000518,000518,000

Retained earnings30,00052,60032,600

$874,000$888,600.$1,186,600

Statement of Earnings

Sales$660,000$755,000$915,000

Cost of goods sold(389,400)(505,850)(649,650)

Other expenses(163,000)(228,000)(226,000)

107,60021,15039,350

Income tax(32,280)(6,345)(11,805)

Net income$75,320$14,805$27,545

a. Based on above information, analyzethe changes in the company's profitability and liquidity, in addition to the management of accounts receivable and inventory from 2018 to 2020.(Round answers to 1 decimal place, e.g. 13.5% or 13.5.)

2018 2019 2020 Sales Cost of goods sold Gross margin Other expenses income taxes Net income 2018 2019 IN Current Ratio Quick Ratio AIR Turnove imes imes times Average Collection Period days days days inventory Turnover imes imes times Days to Sell Inventory days days days