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ca4 INSERT YOUR NAME & ID# IN THE HEADER CA#4 Comparative financial Statements for Track Ltd are shown below. TRACK LTD, Income Statement, For the Year Ended 31-Dec. 2014    2013 Net sales         $1,000,000     $940,000 Cost of goods sold          650,000      635,000 Gross profit          350,000      305,000 Operating expenses          200,000      180,000 Profit from operations         150,000      125,000 Interest expense (net)          35,000      35,000 Profit before income taxes         115,000      90,000 Income tax expense          17,250      13,500 Profit          $97,750      $76,500 TRACK LTD., Balance Sheet, 31-Dec.        IN THE TWO  BLANK LINES INSERT A FORMULA TO CALCULATE CURRENT ASSETS & CURRENT LIABILITIES NOTE DON'T INCLUDE CELL WITH THE YEAR Assets        2014    2013    2012    2014    2013 Cash         $50,000     $42,000      $33,000     QUICK ASSETS    QUICK ASSETS Accounts receivable         100,000      87,000      77,000 Inventories          240,000      200,000      150,000 Prepaid expenses         25,000      31,000      30,000 Long-term debt investments         180,000      100,000      50,000 Land          75,000      75,000      75,000 Building and equipment          570,000      600,000      660,000 Total assets         $1,240,000     $1,135,000     $1,075,000 Liabilities and Shareholders' Equity Liabilities Notes payable         $125,000     $125,000     $125,000 Accounts payable         160,750      140,000      71,000 Accrued liabilities         52,000      50,000      20,000 Bonds payable, due 2018          100,000      100,000      200,000 Total liabilities          437,750      415,000      416,000 Shareholders' equity Preferred shares          200,000      200,000      200,000 Common shares (100,000 issued)         300,000      300,000      300,000 Retained earnings          302,250      220,000      159,000 Total shareholders' equity          802,250      720,000      659,000 Total liabilities and shareholders' equity         $1,240,000     $1,135,000     $1,075,000 Additional information. 1. All sales are on account. 2.Cash provided from operating activities for was             $133,500     in 2014 and     $180,500     in 2013. 3. Cash used by investing activities was         $110,000     in 2014 and     $51,660     in 2013. Instructions USE CELL FORMULAE NOT NUMBERS WHEREEVER POSSIBLE (a) Calculate the following ratios for 2013 and 2014. Indicate whether the change was Favourable (F) or Unfavourable (U). (b) Explain whether the liquidity, solvency and profitability has improved or not and why?. Ratio    2014        2013        Comparison (F),(U) Current ratio Acid-test ratio Receivables turnover Inventory turnover Debt to total assets Ratio    2014        2013        Comparison (F),(U) Interest coverage Free cash flow Profit margin Asset turnover Return on assets (b) Explain whether the liquidity, solvency and profitability has improved or not and why?.