The 2020 four-year comparative financial statements of Digital Shelf Space Corp. follow:

Required

1. Calculate the following for 2020 and 2019 and identify whether the ratios compare favourably (F) or unfavourably (U) from 2019 to 2020:?

(a) Quick ratio,?

(b) Inventory turnover,?

(c) Accounts payable turnover,?

(d) Debt ratio,?

(e) Ratio of pledged assets to secured liabilities,?

(f) Times interest earned,?

(g) Profit margin,?

(h) Return on total assets, and?

(i) Book value per common share.

2. Prepare a trend analysis for 2017 (the base year) through to 2020 using the income statement information.

Analysis Component: Compare and explain the trend in cost of goods sold, operating expenses, and profit to the trend in net sales. Explain why retained earnings are constant over the four years.

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Digital Shelf Space Corp. Balance Sheet December 31 Assets 2020 2019 2018 2017 $ 33,349 $ 27,718 $ 23,267 $ 20,938 Cash. Investments. 56,000 72,000 56,000 40,000 Accounts receivable, net. 31,304 120,207 50,086 17,200 10,018 Inventory. 6,637 4,830 3,784 Prepaid expenses. Plant and equipment, net. Total assets. Liabilities and Equlty Accounts payable. Accrued wages payable. 1,602 876 537 344 548,800 705,600 627,200 784,000 $769,976 $784,517 $821,538 $866,266 $ 50,086 $ 33,182 $ 24,149 $ 18,920 16,028 8,765 5,366 3,440 Income taxes payable. 36,662 19,370 12,823 8,706 571,200 627,200 Long-term note payable, secured by mortgage on plant assets 459,200 515,200 176,000 Common shares, 180,000 shares. 176,000 176,000 176,000 Retained earnings. Total liabilities and equity.. 32,000 32,000 $769,976 32,000 32,000 $784,517 $821,538 $866,266 Digital Shelf Space Corp. Income Statement For Years Ended December 31 2019 $1,001,728 $626,080 2017 2020 2018 Net sales. Cost of goods sold. Gross profit. Operating expenses. Operating profit. Interest expense Profit before taxes. $447,200 $344,000 189,200 $154,800 331,822 241,488 $205,712 107,328 $ 500,864 $294,258 175,302 $ 180,311 $118,956 30,912 $ 88,044 320,553 68,800 $ 98,384 34,272 $ 64,112 12,822 $ 51,290 $ 86,000 37,632 $ 48,368 8,706 27,552 $ 152,759 36,662 $ 116,097 19,370 $ 68,674 Income taxes Profit. $ 39,662