Financial information from the records of Blanchard Masonry follows. The company began operations in 1994. Assume that the year-end 1994 balances are the average balances during 1994. 1997 1996 1995 1994 Cash Accounts receivable Inventory Total current assets $ 7,000 $ 7,000 20,000 14,000 15,000 14,000 $42,000 $35,000 $ 5,000 $ 5,000 8,000 7,000 12,000 12,000 $25,000 $24,000 1997 1996 1995 1994 Current liabilities $14,000 $12,000 $ 10,000 $ 10,000 Sales (all on credit) Less: Cost of goods sold Gross profit $50,000 28,000 $22,000 $45,000 25,000 $20,000 $ 40,000 22,000 $ 18,000 $35,000 20,000 $ 15,000 REQUIRED:

a. Compute the current ratio for each year.

b. Compute gross profit as a percent of sales for each year.

c. Compute inventory turnover and average days supply of inventory.

d. Compute receivables turnover and average number of days outstanding.

e. Comment on the company’s solvency position over the four-year period.