Xavier Company's year-end balance sheet follow (in thousands). At December 31 Assets Cash.... ********** Accounts receiv

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Xavier Company S Year End Balance Sheet Follow In Thousands At December 31 Assets Cash Accounts Receiv 1 (68.71 KiB) Viewed 34 times

Xavier Company's year-end balance sheet follow (in thousands). At December 31 Assets Cash.... ********** Accounts receivable, net........ 20 Merchandise inventory. 10 Prepaid expenses 2.1 …………………. Property, plant and equipment, net 55 Total assets 137.1 ‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒... ………………. Liabilities and Equity Accounts payable......... 26 Long-term notes payable secured by mortgages on property, plant and equipment 40 Share capital, $10 par value. 20 20 Retained earnings ...... 57.5 51.1 Total liabilities and equity...... 131.5 137.1 Required: i. Express the balance sheet in common-size percents; round percents, to two decimals. (10 marks) ii. Assuming annual sales doesn't change over the two-year period, is the change in accounts receivable as a percentage of total assets favorable or unfavorable? Explain why. (3 marks) iii. Compute the current ratio for both years. Did the current ratio improve or worsen over the two-year period? What is the implication of this change? (7 marks) Current Prior Year Year 55 10 сл 1.5 60 131.5 24 30 50