under IFRS Problem 1-4 LO4 Connor Lid. is a large private company owned by the Connor family. It operates a manufacturing hos northern Ontario It has been bal l on of S100 million to expand its man facilities You are a financial analyst with ICB. You have just been given an assignment to analyze Connor's Year cial statements and to identify any concerns about Connor's performance and financial condition The following are financial statements for Connor Lid for Year 7: BALANCE SHEETS dinos Yeart Year 6 55.000 $ 1.000 182.000 Accounts receivable 310.000 Property, plant and equipment 250 SOLO 1 SIS Liabilities and Shareholders' Equity Accounts payable Other accrued liabilities Bonds payable Common shares Retained in S190.000 60.000 180.000 170,000 50,000 180,000 170,000 155 $800,000 57 Sales Cost of goods sold Gross margin Depreciation expense Other expenses Income tax expense Net income INCOME STATEMENT (In 000) Year 7 $1,900,000 (1,350,000) 550,000 (38,000) (396,000) (46,000) $ 70,000 Year 6 $1,850,000 (1.270.000) 580,000 (32,000) (415,000) (53,000) $ 80,000 Additional Information Connor uses the straight-line method when depreciating its property, plant, and equipment. Interest expense was $10,000 for Year 6 and Year 7. Required (a) Convert Connor's financial statements for both Year 7 and Year 6 into common-sized financial statements using: (i) vertical analysis (ii) horizontal analysis (b) Identify any financial statement items that seem to be peculiar relative to expectations and explain why they seem peculiar. (c) Calculate the current ratio, debt-to-equity ratio, return on assets, and return on equity for both Year 7 and Year 6. (d) Explain whether Connor's liquidity, solvency, and profitability have improved or deteriorated from Year 6 to Year 7