Requirement 1. Perform a trend analysis on Tapping's sales revenue, inventory, and receivables over the past three years, using 2018 as the base. Is the trend in each of these areas favorable or unfavorable for the company? Begin by calculating the trend analysis. (Round the ratios to the nearest whole percent, X%.) 2021 2020 2019 2018 Net sales revenue % % % % % % % % Inventory Accounts receivable, net % % % % Is the trend in each of these areas favorable or unfavorable for the company? The trend percentages for sales revenue is The trend percentage in inventory indicates a The trend percentage in net receivables is than the increase in sales, which is v trend. Requirement 2. Using the industry averages as benchmarks, analyze Tapping's performance over the past three years in the following areas: a) liquidity, b) turnover, c) overall debt payment ability, and d) profitability. a. Start by analyzing the liquidity ratios: the current ratio and the quick ratio. Select the formula and enter the amounts to calculate the current ratios for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Current ratio 2021 . non a. Start by analyzing the liquidity ratios: the current ratio and the quick ratio. Select the formula and enter the amounts to calculate the current ratios for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) - Current ratio 2021 2020 2019 Next, select the formula and enter the amounts to calculate the quick (acid-test) ratios for the years 2019 through 2021. (Abbreviations used: Cash* = cash and cash equivalents, SE = stockholders' equity, and ST = short-term. Round the ratios to two decimal places, X.XX.) + + Quick ratio 2021 ( + + 2020 ( + 2019 ( b. Analyze the turnover ratios: inventory turnover and days' inventory outstanding, accounts receivable turnover, days' sales outstanding, accounts payable turnover, days' payables outstanding, and cash conversion cycle. Select the formula and enter the amounts to calculate the inventory turnover for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Inventory turnover 2021 b. Analyze the turnover ratios: inventory turnover and days' inventory outstanding, accounts receivable turnover, days' sales outstanding, accounts payable turnover, days' payables outstanding, and cash conversion cycle. Select the formula and enter the amounts to calculate the inventory turnover for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Inventory turnover 2021 2020 2019 Select the formula and enter the amounts to calculate days' inventory outanding (DIO) for the years 2019 through 2021. (Enter formula ratios to two decimal places, X.XX. Use a 365-day year. Round the DIO to one decimal place, X.X.) Days' inventory outstanding (DIO) 2021 2020 2019 Select the formula and enter the amounts to calculate the accounts receivable turnover for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Accounts receivable turnover 2021 2020 2019 Select the formula and enter the amounts to calculate the accounts receivable turnover for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Accounts receivable turnover 2021 2020 2019 Select the formula and enter the amounts to calculate days' sales outanding (DSO) for the years 2019 through 2021. (Use a 365-day year. Round the DSO to one decimal place, X.X.) = Days' sales outstanding (DSO) 2021 2020 2019 Select the formula and enter the amounts to calculate the accounts payable turnover for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Accounts payable turnover 2021 2020 2019 Select the formula and enter the amounts to calculate days' pavables. putanding (DPO) for the years 2019 through 2021 (Use a 365-day vear Round the DPO to one decimal place XX) Select the formula and enter the amounts to calculate days' payables outanding (DPO) for the years 2019 through 2021. (Use a 365-day year. Round the DPO to one decimal place, X.X.) Days' payables outstanding (DPO) 2021 2020 2019 Select the formula and enter the amounts to calculate the cash conversion cycle (in days) for the years 2019 through 2021. (Enter all amounts to one decimal place, XX.) = Cash conversion cycle 2021 = 2020 + - 2019 c. Analyze the ability to pay long-term debt: debt ratio and times-interest-earned ratio. Select the formula and enter the amounts to calculate the debt ratios for the years 2019 through 2021. (Enter the ratios in decimal form (not as percentages) to two decimal places, X.XX.) Debt ratio 2021 - 2020 2019 Select the formula and enter the amounts to calculate the times-interest-earned ratios for the years 2019 through 2021. (Round the ratios to one decimal place, X.X.) Times-interest-earned ratio 2021 2020 2019 d. Analyze the profitability ratios: gross margin percentage and operating income percentage. Select the formula and enter the amounts to calculate the gross margin (gross profit) percentages for the years 2019 through 2021. (Round the ratios to one tenth of a percent, X.X%.) Gross margin % 2021 % 2020 . % 2019 % Select the formula and enter the amounts to calculate the operating income percentage percentages for the years 2019 through 2021. (Round the ratios to one-tenth of a percent, X.X%.) Operating income % 2021 % 2020 % 2019 . % Selected data from Tapping Furniture, Inc., follows. (Click the icon to view selected balance sheet data.) (Click the icon to view selected income statement data.) Industry averages have been gathered for several ratios. (Click the icon to view the ratios.) Read the requirements. Now, using the industry averages as benchmarks, analyze Tapping's performance over the past three years. Overall, Tapping's performance over the past three years looks and compare favorably to the industry averages. Most all the ratios showed v over the three years. Tapping's performance over the past three years are due to: (Select all that apply.) A. Operating income percentages are decreasing B. Declining earnings C. Improved accounts receivable turnover OD. Decreased cash flow UE. Increasing debt ratio F. Decreasing gross margin G. Payment of accounts payable is getting faster H. Improved interest coverage NI Inability to collect accounts receivable J. Buildup of inventories OK. Increasing long-term liabilities Requirement 3. Evaluate Tapping's quality of earnings. Are there any red flags in your analysis? Explain. First, select the formula and enter the amounts to calculate the net income percentage ratios for years 2019 through 2021. (Round the ratios to one-tenth percent, X.X%.) Selected data from Tapping Furniture, Inc., follows. (Click the icon to view selected balance sheet data.) (Click the icon to view selected income statement data.) Industry averages have been gathered for several ratios. E: (Click the icon to view the ratios.) Read the requirements. : III IE. Increasing debt ratio OF. Decreasing gross margin O G. Payment of accounts payable is getting faster OH. Improved interest coverage DI Inability to collect accounts receivable J. Buildup of inventories OK. Increasing long-term liabilities Requirement 3. Evaluate Tapping's quality of earnings. Are there any red flags in your analysis? Explain. First, select the formula and enter the amounts to calculate the net income percentage ratios for years 2019 through 2021. (Round the ratios to one-tenth percent, XX%.) Net income % 2021 . % 2020 . % 2019 % Refer to the quality of earnings ratios you calculated in Requirements 2 and 3 and evaluate Tapping's quality of earnings. Are there any red flags in your analysis? Explain. All the ratios are v Quality of earnings is Data table - Data table Furniture industry averages Selected balance sheet data 2021 2020 2019 2018 Current ratio 2.1 Cash $ 2,900 $ 3,400 S 4,400 Quick ratio 1.0 Marketable securities 600 700 600 87.3 Accounts receivable, net 7,100 6.600 5,100 $ 4,000 Days' inventory outstanding Days' sales outstanding Days' payable outstanding 46.6 Inventory 6,800 5,300 4,300 4,000 26.9 Total current assets 17,400 14,400 Debt ratio 68% 16,000 7,700 7,400 8,000 Times-interest-earned ratio 17.1 Long-term assets Total assets Accounts payable 24,800 22.400 51% Gross margin percentage Operating income percentage 23,700 1,900 2,900 1,500 1,700 18% 7,300 6,300 Short-term notes payable Total current liabilities Total long-term liabilities 6,800 8,900 10,500 7,200 380 1,940 6,403 Print Done - table % Selected income statement data 2021 2020 2019 2018 nd evaluate Tapping's quality of earnings. Are there any re Net sales revenue (assume all sales are credit sales) $ 37,200 Cost of goods sold 39,300 $ 38,400 $ 38,100 $ 22,700 19,460 17,750 11,600 12,000 12,400 Operating expenses Interest expense 375 500 605 Income taxes 375 1,024 1,123 Requirement 1. Perform a trend analysis on Tapping's sales revenue, inventory, and receivables over the past three years, using 2018 as the base. Is the trend in each of these areas favorable or unfavorable for the company? Begin by calculating the trend analysis. (Round the ratios to the nearest whole percent, X%.) 2021 2020 2019 2018 Net sales revenue % % % % % % % % Inventory Accounts receivable, net % % % % Is the trend in each of these areas favorable or unfavorable for the company? The trend percentages for sales revenue is The trend percentage in inventory indicates a The trend percentage in net receivables is than the increase in sales, which is v trend. Requirement 2. Using the industry averages as benchmarks, analyze Tapping's performance over the past three years in the following areas: a) liquidity, b) turnover, c) overall debt payment ability, and d) profitability. a. Start by analyzing the liquidity ratios: the current ratio and the quick ratio. Select the formula and enter the amounts to calculate the current ratios for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Current ratio 2021 . non a. Start by analyzing the liquidity ratios: the current ratio and the quick ratio. Select the formula and enter the amounts to calculate the current ratios for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) - Current ratio 2021 2020 2019 Next, select the formula and enter the amounts to calculate the quick (acid-test) ratios for the years 2019 through 2021. (Abbreviations used: Cash* = cash and cash equivalents, SE = stockholders' equity, and ST = short-term. Round the ratios to two decimal places, X.XX.) + + Quick ratio 2021 ( + + 2020 ( + 2019 ( b. Analyze the turnover ratios: inventory turnover and days' inventory outstanding, accounts receivable turnover, days' sales outstanding, accounts payable turnover, days' payables outstanding, and cash conversion cycle. Select the formula and enter the amounts to calculate the inventory turnover for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Inventory turnover 2021 b. Analyze the turnover ratios: inventory turnover and days' inventory outstanding, accounts receivable turnover, days' sales outstanding, accounts payable turnover, days' payables outstanding, and cash conversion cycle. Select the formula and enter the amounts to calculate the inventory turnover for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Inventory turnover 2021 2020 2019 Select the formula and enter the amounts to calculate days' inventory outanding (DIO) for the years 2019 through 2021. (Enter formula ratios to two decimal places, X.XX. Use a 365-day year. Round the DIO to one decimal place, X.X.) Days' inventory outstanding (DIO) 2021 2020 2019 Select the formula and enter the amounts to calculate the accounts receivable turnover for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Accounts receivable turnover 2021 2020 2019 Select the formula and enter the amounts to calculate the accounts receivable turnover for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Accounts receivable turnover 2021 2020 2019 Select the formula and enter the amounts to calculate days' sales outanding (DSO) for the years 2019 through 2021. (Use a 365-day year. Round the DSO to one decimal place, X.X.) = Days' sales outstanding (DSO) 2021 2020 2019 Select the formula and enter the amounts to calculate the accounts payable turnover for the years 2019 through 2021. (Round the ratios to two decimal places, X.XX.) Accounts payable turnover 2021 2020 2019 Select the formula and enter the amounts to calculate days' pavables. putanding (DPO) for the years 2019 through 2021 (Use a 365-day vear Round the DPO to one decimal place XX) Select the formula and enter the amounts to calculate days' payables outanding (DPO) for the years 2019 through 2021. (Use a 365-day year. Round the DPO to one decimal place, X.X.) Days' payables outstanding (DPO) 2021 2020 2019 Select the formula and enter the amounts to calculate the cash conversion cycle (in days) for the years 2019 through 2021. (Enter all amounts to one decimal place, XX.) = Cash conversion cycle 2021 = 2020 + - 2019 c. Analyze the ability to pay long-term debt: debt ratio and times-interest-earned ratio. Select the formula and enter the amounts to calculate the debt ratios for the years 2019 through 2021. (Enter the ratios in decimal form (not as percentages) to two decimal places, X.XX.) Debt ratio 2021 - 2020 2019 Select the formula and enter the amounts to calculate the times-interest-earned ratios for the years 2019 through 2021. (Round the ratios to one decimal place, X.X.) Times-interest-earned ratio 2021 2020 2019 d. Analyze the profitability ratios: gross margin percentage and operating income percentage. Select the formula and enter the amounts to calculate the gross margin (gross profit) percentages for the years 2019 through 2021. (Round the ratios to one tenth of a percent, X.X%.) Gross margin % 2021 % 2020 . % 2019 % Select the formula and enter the amounts to calculate the operating income percentage percentages for the years 2019 through 2021. (Round the ratios to one-tenth of a percent, X.X%.) Operating income % 2021 % 2020 % 2019 . % Selected data from Tapping Furniture, Inc., follows. (Click the icon to view selected balance sheet data.) (Click the icon to view selected income statement data.) Industry averages have been gathered for several ratios. (Click the icon to view the ratios.) Read the requirements. Now, using the industry averages as benchmarks, analyze Tapping's performance over the past three years. Overall, Tapping's performance over the past three years looks and compare favorably to the industry averages. Most all the ratios showed v over the three years. Tapping's performance over the past three years are due to: (Select all that apply.) A. Operating income percentages are decreasing B. Declining earnings C. Improved accounts receivable turnover OD. Decreased cash flow UE. Increasing debt ratio F. Decreasing gross margin G. Payment of accounts payable is getting faster H. Improved interest coverage NI Inability to collect accounts receivable J. Buildup of inventories OK. Increasing long-term liabilities Requirement 3. Evaluate Tapping's quality of earnings. Are there any red flags in your analysis? Explain. First, select the formula and enter the amounts to calculate the net income percentage ratios for years 2019 through 2021. (Round the ratios to one-tenth percent, X.X%.) Selected data from Tapping Furniture, Inc., follows. (Click the icon to view selected balance sheet data.) (Click the icon to view selected income statement data.) Industry averages have been gathered for several ratios. E: (Click the icon to view the ratios.) Read the requirements. : III IE. Increasing debt ratio OF. Decreasing gross margin O G. Payment of accounts payable is getting faster OH. Improved interest coverage DI Inability to collect accounts receivable J. Buildup of inventories OK. Increasing long-term liabilities Requirement 3. Evaluate Tapping's quality of earnings. Are there any red flags in your analysis? Explain. First, select the formula and enter the amounts to calculate the net income percentage ratios for years 2019 through 2021. (Round the ratios to one-tenth percent, XX%.) Net income % 2021 . % 2020 . % 2019 % Refer to the quality of earnings ratios you calculated in Requirements 2 and 3 and evaluate Tapping's quality of earnings. Are there any red flags in your analysis? Explain. All the ratios are v Quality of earnings is Data table - Data table Furniture industry averages Selected balance sheet data 2021 2020 2019 2018 Current ratio 2.1 Cash $ 2,900 $ 3,400 S 4,400 Quick ratio 1.0 Marketable securities 600 700 600 87.3 Accounts receivable, net 7,100 6.600 5,100 $ 4,000 Days' inventory outstanding Days' sales outstanding Days' payable outstanding 46.6 Inventory 6,800 5,300 4,300 4,000 26.9 Total current assets 17,400 14,400 Debt ratio 68% 16,000 7,700 7,400 8,000 Times-interest-earned ratio 17.1 Long-term assets Total assets Accounts payable 24,800 22.400 51% Gross margin percentage Operating income percentage 23,700 1,900 2,900 1,500 1,700 18% 7,300 6,300 Short-term notes payable Total current liabilities Total long-term liabilities 6,800 8,900 10,500 7,200 380 1,940 6,403 Print Done - table % Selected income statement data 2021 2020 2019 2018 nd evaluate Tapping's quality of earnings. Are there any re Net sales revenue (assume all sales are credit sales) $ 37,200 Cost of goods sold 39,300 $ 38,400 $ 38,100 $ 22,700 19,460 17,750 11,600 12,000 12,400 Operating expenses Interest expense 375 500 605 Income taxes 375 1,024 1,123