s Fabrics Ltd. ve Income Statements 2016 $ 2016% 2017 $ 2017% 2018 $ 2018% Sales 599'100 COGS 291'000 538'900 259200 508100 234300 Gross margin 308'100 279700 273800 Operating expenses 106'200 104600 104100 Operating income 201'900 175 100 169700 Interest expense 11'200 10'500 11900 Income before taxes 190700 164'600 157800 Income taxes (40%) 76'280 65840 63120 Net income 114'420 98760 94680 s Fabrics Ltd. tive Balance Sheets 2016 $ 2016% 2017 $ 2017% 2018 $ 2018% Assets Cash A/R (net) Inventory 32'000 25800 20500 126'860 127000 94'300 60'000 80700 56000 Prepaid expenses 11'000 10000 4600 Total current assets 229'860 243'500 175400 Capital assets (net) 668'900 576'000 540300 Total assets 898'760 819500 715700 Liabilities & Shareholders' Equity Accounts payable 53'120 81200 79100 Accrued expenses 11'000 12240 41700 Total current liabilities 64'120 93440 120800 Long-term debt 170'000 160'000 150000 Total liabilities 234'120 253440 270800 Common stock ($0.50 par value) 6'000 6'000 5000 Additional paid in capital 99'000 99'000 62'000 Retained earnings 559'640 461060 377900 Total equity 664'640 566060 444900 Total liabilities & equity 898760 819'500 715700 Closing Stock Price $ 38.00 $ 35.00 $ 30.00 Required: 1. Prepare a horizontal analysis for all 3 years. Use %, not dollars. What significant changes do you see? 2. Prepare common-size financial statements for all 3 years. What significant changes do you see? 3.Assess Patel's liquidity by using liquidity ratios. Is the company's position improving or deteriorating? Explain your answer. 4. Assess Pippin's profitability by using profitability ratios. For ratios that require average balances calculate them for 2017 & 2018 only. Assess's Patel's profitability using these ratios 5. How does the stock market view Pippin's performance over thses three years? Explain the basis for your answer. 6. After you have completed the above analysis, identify what you consider to be the three most significant weaknesses in Patel's performance. In order to pass this assignment, you must complete all parts of the assignment