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Refer the following table. Focus Metals Inc. Comparative Balance...

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Accounting

Refer the following table.

Focus Metals Inc.
Comparative Balance Sheet Information
November 30
(millions of $)
2020 2019
Cash $ 33 $ 103
Accounts receivable (net) 454 300
Inventory 94 87
Plant and equipment (net) 2,886 2,970
Accounts payable 347 263
Long-term notes payable* 1,870 2,430
Common shares 470 470
Retained earnings 780 297

*90% of the plant and equipment are secured by long-term notes payable.

Focus Metals Inc.
Income Statement
For Year Ended November 30
(millions of $)
2020 2019
Net sales $ 3,090 $ 2,292
Cost of goods sold 1,072 862
Gross profit $ 2,018 $ 1,430
Operating expenses:
Depreciation expense $ 122 $ 122
Other expenses 795 662
Total operating expenses 917 784
Profit from operations $ 1,101 $ 646
Interest expense 195 229
Income tax expense 61 65
Profit $ 845 $ 352

Required: Calculate Focus Metals solvency ratios for 2019 and 2020. (Round the final answers to 2 decimal places.)

Analysis Component: Identify whether the change in each ratio from 2019 to 2020 was favourable or unfavourable.

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