The comparative financial statements of New World Piano Company for 2017, 2016, and 2015 included the following selected data:

Requirements
1. As a financial advisor to an investor in New World Piano Company, compute these ratios for 2017 and 2016:
a. Current ratio
b. Acid-test ratio
c. Days' sales in receivables
2. Write a memo explaining to your client which ratio values showed improvement from 2016 to 2017 and which ratio values deteriorated. State whether the overall trend is favourable or unfavourable for the company, give the reason for your evaluation, and advise your clientregarding its investment.
3. Recommend two ways to improve cash flow from receivables.

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(in millions) 2017 2016 2015 Balance sheet: Current assets: Cash Short-term investments Receivables, net of allowance for uncollectible accounts of $67 $ 66 $62 73 81 $7, $6, and $4, respectively Inventories Prepaid expenses Total current assets 195 349 16 $ 786 715 692 $ 420 405 388 226 398 174 375 19 Total current liabilities Income statement Net sales $2,071 $2,005 $1,965