Complete ratio analysis, recognizing significant differences Home Health, Inc., has come to Jane Ross for a yearly financial checkup. As a first step, Jane has prepared a complete set of ratios for fisca 2018 and 2019 She will use them to look for significant changes in the company's situation from one year to the next. a. To focus on the degree of change, calculate the year-to-year proportional change by subtracting the year 2018 ratio from the year 2019 ratio, then dividing the difference by the year 2018 ratio. Multiply the 100. Preserve the positive or negative sign. The result is the percentage change in the ratio from 2018 to 2019. Calculate the proportional change for the ratios shown here. b. For any ratio that shows a year-to-year difference of 10% or more, state whether the difference is in the company's favor or not. c. For the most significant changes (25% or more), look at the other ratios and cite at least one other change that may have contributed to the change in the ratio that you are discussing. Proportional Difference Liquidity Ratios Current ratio % (Round to two decimal places.) Proportional Difference Liquidity Ratios Quick ratio % (Round to two decimal places.) Proportional Difference Activity Ratios Inventory tumover (Round to two decimal places.) Proportional Difference Activity Ratios Average collection period (Round to two decimal places) Proportional Difference Activity Ratios Total asset turnover (Round to two decimal places.) Proportional Difference Debt Ratio Debt ratio % (Round to two decimal places.) Proportional Difference Debt Ratio Times interest earned ratio % (Round to two decimal places.) Proportional Difference % (Round to two decimal places.) Proportional Difference Profitability Ratios Gross profit margin Profitability Ratios Operating profit margin Profitability Ratios Net profit margin % (Round to two decimal places.) Proportional Difference (Round to two decimal places.) Proportional Difference Profitability Ratios Return on total assets (Round to two decimal places.) Proportional Difference Profitability Ratios Return on common equity % (Round to two decimal places.) Home Health, Inc. Financial Ratios Ratio 2018 2019 Current ratio Quick ratio Inventory turnover Average collection period Total asset turnover Debt ratio Times interest earned ratio Gross profit margin Operating profit margin Net profit margin Return on total assets Return on common equity Pricelearnings ratio Market/book ratio 3.25 2.53 12.84 41.5 days 1.39 0.46 3.97 66% 15% 8.3% 11.8% 20.8% 10.2 1.44 2.97 2.24 10.27 31.4 days 2.04 0.65 3.87 63% 17% 8.1% 16.3% 42.1% 9.3 1.23