The following financial statements are for Gulf Corp. Gulf Corp. Gulf Corp. Income Statement For Years Ended December 31, 2014, 2013, and 2012 2014 2013 Sales 565,500 502,900 Cost of goods sold 207,500 260,300 Gross profit from sales 358,000 242,600 Operating expenses 128,000 121,500 Operating income 230,000 121,100 Interest expense 1,750 2,000 Income before taxes 228,250 119,100 Income taxes 33,500 40,500 Net income 194,750 78,600 2012 628,600 301,700 326,900 110,800 216,100 2,100 214,000 43,400 170,600 Balance Sheet December 31, 2014, 2013, and 2012 Assets 2014 Cash 14,500 Short-term investments 72,000 Accounts receivable, net 34,100 Merchandise inventory 78,100 Prepaid expenses 11,100 Notes receivable, due in 2016 12,500 Property, plant and equipment, net 212,000 Total assets 434,300 Liabilities and Equity Accounts payable 9,500 Salaries payable 3,600 Income taxes payable 21,500 Long-term note payable secured by mortgage on plant assets 151,000 Share capital 140,000 Retained earnings 108,700 Total liabilities and equity 434,300 2013 17,400 74,000 37,700 86,300 11,400 11,500 257,000 495,300 2012 16,600 81,000 43,400 79,800 9,800 14,000 274,000 518,600 10,000 4,100 20,300 140,000 140,000 180,900 495,300 11,100 4,500 21,750 156,000 130,000 195,250 518,600 Compute the acid-test ratio below, and indicate whether the change from year to year is favourable or unfavourable. For your analysis, assume that all other things have remained constant. Apply your analysis in very general terms. All values should be accurate to at least two decimal places. Ratio 2014 2013 Measure of Analysis Acid-test ratio (select one) Favourable