The comparative statements of Andy's Art Company are presented below.

Additional information:
1. All sales were on account.
2. Weighted-average common shares for both years was 57,000.
Instructions
Calculate the following ratios for 2017 and 2016. Indicate whether each ratio has improved or deteriorated.
(a) Gross profit margin
(b) Profit margin
(c) Earnings per share
(d) Receivables turnover
(e) Collection period
(f) Inventory turnover
(g) Days sales in inventory
(h) Return on common shareholders' equity
(i) Return on assets
(j) Current ratio
(k) Acid-test ratio
(l) Asset turnover
(m) Debt to total assets
TAKING IT FURTHER
Calculate the operating cycle for Andy's Arts and compare it to its nearest competitor, which has an operating cycle of 60 days. Does Andy's Arts have a liquidity problem?

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ANDY'S ART COMPANY Income Statement For the Year Ended December 31 2017 2016 Net sales Cost of goods sold Gross profit Selling and administrative expense Income from operations Interest expense Income before income taxes Income tax expense $2,153,650 1,119,900 1,033,750 750,000 283,750 20,000 263,750 60,665 $ 203,085 $1,828,500 1,010,500 818,000 516,000 302,000 18,000 284,000 85,000 199,000 ANDY'S ART COMPANY Balance Sheet December 31 Assets Current assets 2017 2016 2015 Cash Accounts receivable (net) Inventory 123,050 142,600 170,000 435,650 605,300 $1,040,950 $129,100 122,800 113,000 364,900 605,300 $970,200 $114,200 102,800 115,500 332,500 520,300 $852,800 Total current assets Property, plant, and equipment (net) Total assets Current liabilities Accounts payable Income taxes payable Total current liabilities Bonds payable Total liabilities Shareholders' equity $165,000 46,250 211,250 220,000 431,250 $160,000 43,500 203,500 210,000 413,500 $145,400 42,000 187,400 200,000 387,400 Common shares Retained earnings 280,000 329,700 609,700 280,000 276,700 556,700 $970,200 300,000 165,400 465,400 $852,800 Total shareholders' equity Total liabilities and shareholders equity $1