Question 4 (Ratio analysis over time) The following information comes from the accounting records of Hercep Ltd. for the first three years of its existence: 018 2019 2020 Statement of Financial Position Assets Cash Accounts receivable Inventoy Capital assets (net) Other assets $27,700 141,000 231,000 460,000 266,000 $871,300 $890,700 $1,125,700 $22,700 $20,700 67,600 119,000 142 425,000 462,000 237,000 214,000 52,000 Liabilities and equity Accounts payable Long-term debt Common shares Retained earnings $111,000 $55,500 $111,000 460,000 522,000 32,700 $871,300 $890,700 $1,125,700 180,000 230,000 522,000 83,200 522,000 58,300 Statement of Earnings Sales Cost of goods sold Other expenses $630,000 $840,000 $950,000 (352,800) (575,400) (674,500) (162,000) (240,000 (238,000) 37,500 (34,560) 7,380) (11,250) $26,250 115,200 24,600 Income tax Net income $80,640 $17,220 (a1) 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, eg, 13.5% or 13.5.) 2018 2019 2020 Sales Cost of goods sold Gross margin Other expenses Income taxes Net income 2018 2019 2020 Current Ratio Quick Ratio A/R Turnover Average Collection Period times times times days days Inventory Turnover times times Days to Sell Inventory days days SHOW SOLUTIONSHOW ANSWER LINK TO TEXT