Application Problem 12-15A ai, b1 (Part Level Submission) (Ratio analysis over time) The following information comes from the accounting records of Hercep Ltd. for the first three years of its existence: 2018 2019 2020 Statement of Financial Position Assets Cash Accounts receivable Inventory Capital assets (net) Other assets $23,300 67,200 115,000 432,000 238,000 $875,500 $19,700 $27,100 50,000 144,500 136,000 227,000 459,000 484,000 204,000 268,600 $868,700 $1,151,200 Liabilities and equity Accounts payable Long-term debt Common shares Retained earnings $101,000 192,000 521,000 61,500 $875,500 $50,500 242,000 521,000 55,200 $868,700 $101,000 484,000 521,000 45,200 $1,151,200 Statement of Earnings Sales Cost of goods sold Other expenses $620,000 $770,000 (372,000) (523,600) (161,000) (220,000) 87,000 26,400 (26,100) (7,920) $50,900 $18,480 $970,000 (679,000) (218,000) 73,000 (21,900) $51,100 Income tax Net income (1) Your answer is correct. Based on above information, analyze the changes in the company's profitability and liquidity, in addition to the management of accounts receivable and inventory from 2018 to 2020. (Round answers to 1 decimal place, e.g. 13.5% or 13.5.) 2018 2020 Sales 100 Cost of goods sold 818 Gross margin Other expenses Income taxes Net income 2020 Current Ratio Quick Ratio 3.9:1 1.4:11 17:1 13.1 times 10.0 times A/R Turnover 0.9:1 9.2 times 39.6 days 3.2 times 112.8 days 27.8 days Average Collection Period Inventory Turnover Days to Sell Inventory 36.6 days 4.2 times 87.5 days 3.7 times 97.6 days LINK TO TEXT Attempts: 1 of 2 used (1) Based on the above information, analyze the company's use of leverage from 2018 to 2020. (Round answers to 1 decimal place, e.g. 15.1%.) 2018 2019 2020 Debt to Equity Return on Assets Return on Equity