3 of 7 < > Current Attempt in Progress /question/2 -/5 E (Liquidity and profitability analysis) Superior Kitchens and Bathrooms Ltd. is a small business that sells kitchen and bathroom fixtures and accessories and also does design and installation. The business was started three years ago by Qing Liu. Initially the company's operations consisted of kitchen and bathroom renovations for individual homes. In 2019, the company started providing design and installation services to local contractors to expand sales. As the contractor side of the business grew in 2020, the company purchased a truck for deliveries. All sales to individuals are cash on delivery, but for contracting jobs, customers are invoiced and are offered 30-day payment terms. The company's suppliers offer terms of 30 days. Selected financial information for Superior Kitchens and Bathrooms Ltd. follows. Assets 2020 2019 Cash $11,966 $4,557 Accounts receivable 19,879 13,083 Inventory 15,440 8,526 Land 21,200 21,200 Building and equipment 61,300 53,700 Total assets $129,785 $101,066 Liabilities and equity Accounts payable $13,300 $11,200 Short-term note payable 2,500 0 Mortgage payable current 3,500 3,500 Mortgage payable 31,500 35,000 Share capital 16,700 16.200 Retained earnings 62,285 35,166 Total liabilities and equity $129,785 $101,066 O Question 3 of 7 < > Total liabilities and equity $129,785 -/5 $101,066 Other information Sales $265,000 $222,000 Cost of goods sold 155,025 118,992 Net income 27,119 9,800 Assume the growth in sales in 2020 is primarily from the contracting business. Calculate the gross margins and the profit margins. (Round answers to 1 decimal place, e.g. 15.1%.) Gross margin Profit margin 2020 eTextbook and Media 2019 41.5 % % 46 % % Calculate the company's current ratio and quick ratio for both years. (Round answers to 2 decimal places, eg. 1.84) Current ratio Quick ratio 2020 2019 times times times times eTextbook and Media Calculate the company's accounts receivable turnover ratio for 2020. How quickly is the company collecting its receivables? (Round answers to 1 decimal place, e.g. 18.4.) Accounts receivable turnover Average collection period eTextbook and Media 2020 times days Assume that 50% of the sales come from the contracting business and recalculate the accounts receivable turnover for 2020. (Round answers to 1 decimal place, e.g. 18.4.) Accounts receivable-contracting turnover Average collection period eTextbook and Media 2020 times days