use Northstar Corp.'s financial statements to compute the required ratios below, and indicate whether the change from year to year is favourable or unfavourable. All the sales recorded in the income statement are on credit. 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.

Northstar Corp.Income StatementFor Years Ended December 31, 2014, 2013, and2012

201420132012

Sales$1,318,800 $1,496,400$1,335,600

Cost of goods sold406,500439,000475,400

Gross profit from sales912,3001,057,400 860,200

Operating expenses231,300224,800190,000

Income from operations681,000832,600670,200

Interest expense1,8501,9502,400

Income before taxes679,150830,650667,800

Income taxes119,700131,100109,900

Net income$559,450$699,550$557,900

Northstar Corp.Balance SheetDecember 31, 2014, 2013, and 2012Assets

2014 20132012

Cash$59,900$70,200$69,200

Short-term investments11,00014,00013,000

Accounts receivable, net35,30043,70043,400

Merchandise inventory16,00013,90015,800

Prepaid expenses7,3007,5007,400

Notes receivable, due in 20179,0008,00010,000

Plant assets, net279,000257,000240,000

Total assets$417,500$414,300 $398,800

Liabilities and Equity

Accounts payable$50,100$51,400$44,100

Salaries payable12,40012,20010,600

Income taxes payable85,050 78,75077,300

Long-term note payable secured by

mortgage on plant assets84,00089,00099,000

Share capital, 200,000 shares180,000160,000160,000

Retained earnings5,95022,9507,800

Total liabilities and equity$417,500$414,300$398,800

Ratio20142013Analysis

Equity ratio (%)()

Accounts receivable collection period()

Return on equity (%)()

Net profit ratio (%()

Number of days of sales in inventory()