The following information is available for MNO Company:

MNO Company
Statement of Financial Position
For the year ended December 31
	2020	2019
Assets:
Current Assets:
Cash	$21,000	$20,300
A/R	$22,400	$25,200
Inventory	$19,600	$16,800
Prepaid Expenses	$1,400	$700
Total Current Assets	$64,400	$63,000
Non-Current Assets:
PPE, net	$142,800	$134,400
Intangible Assets	$7,000	$5,600
Total Non-Current Assets	$149,800	$140,000
Total Assets	$214,200	$203,000
Liabilities:
Current Liabilities
Accounts Payable	$14,000	$9,800
Short Term Debt	$25,200	$21,000
Total Current Liabilities	$39,200	$30,800
Non-Current Liabilities:
Long Term Debt	$70,000	$75,600
Total Liabilities	$109,200	$106,400
Equity:
Common Shares	$8,400	$8,400
Retained Earnings	$96,600	$88,200
Total Equity	$105,000	$96,600
Total Liabilities and Equity	$214,200	$203,000

MNO Company
Statement of Earnings
For the year ended December 31, 2020
Sales (90% on credit)	$140,000
Cost of goods sold	$84,000
Gross margin	$56,000
Selling and Distribution expenses	$20,300
Administrative expenses	$15,400
Depreciation expense	$5,600
Operating income	$14,700
Interest expense	$700
Net income before tax	$14,000
Tax expense	$2,800
Net Income	$11,200

Required:

a) Fill in the missing information in the chart provided. Show details of your calculations in the space provided. For the Trend column only use improving or worsening or stable for your answer. (round to 4 decimal places) (11 marks)

b) Provide an overall assessment of the companys liquidity and leverage. In your assessment, explain the relationship between liquidity and leverage. Identify which ratios you used to determine your assessment. (4 marks)

a)

Ratio	2020	2019	Trend (Improving or Worsening)
Return on equity		10.24%
Net profit margin	8%	6%
Gross profit margin		40%
Quick (Acid test) ratio		1.4773
Inventory turnover		4.1342
Receivable turnover		5.1254
Current ratio	1.6429	2.0455
Long term debt to equity	0.6667	0.7826
Debt ratio	0.5098	0.5241
Total Asset Turnover		0.5983

b)