Question

Rotorua Products, Ltd., of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company’s current assets, current liabilities, and sales over the last five years (Year 5 is the most recent year) are as follows:

	Year 1			Year 2			Year 3			Year 4			Year 5
Sales	$	4,538,620		$	4,810,420		$	5,059,140		$	5,531,590		$	5,664,970
Cash	$	86,561		$	90,131		$	89,470		$	75,324		$	77,867
Accounts receivable, net		404,243			422,030			432,018			511,505			573,091
Inventory		818,757			864,103			820,838			888,646			914,051
Total current assets	$	1,309,561		$	1,376,264		$	1,342,326		$	1,475,475		$	1,565,009
Current liabilities	$	304,490		$	339,212		$	328,086		$	318,458		$	391,038

Required:

1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

Answer 1

• Working

Trend
	Year 1	Year 2	Year 3	Year 4	Year 5
Sales	( $ 4538620 / $ 4538620 )*100	( $ 4810420 / $ 4538620 )*100	( $ 5059140 / $ 4538620 )*100	( $ 5531590 / $ 4538620 )*100	( $ 5664970 / $ 4538620 )*100
Current Assets:
Cash	( $ 86561 / $ 86561 )*100	( $ 90131 / $ 86561 )*100	( $ 89470 / $ 86561 )*100	( $ 75324 / $ 86561 )*100	( $ 77867 / $ 86561 )*100
Accounts receivables	( $ 404243 / $ 404243 )*100	( $ 422030 / $ 404243 )*100	( $ 432018 / $ 404243 )*100	( $ 511505 / $ 404243 )*100	( $ 573091 / $ 404243 )*100
Inventory	( $ 818757 / $ 818757 )*100	( $ 864103 / $ 818757 )*100	( $ 820838 / $ 818757 )*100	( $ 888646 / $ 818757 )*100	( $ 914051 / $ 818757 )*100
Total current assets	( $ 1309561 / $ 1309561 )*100	( $ 1376264 / $ 1309561 )*100	( $ 1342326 / $ 1309561 )*100	( $ 1475475 / $ 1309561 )*100	( $ 1565009 / $ 1309561 )*100
Current Liabilities	( $ 304490 / $ 304490 )*100	( $ 339212 / $ 304490 )*100	( $ 328086 / $ 304490 )*100	( $ 318458 / $ 304490 )*100	( $ 391038 / $ 304490 )*100

• Requirement

Trend
	Year 1	Year 2	Year 3	Year 4	Year 5
Sales	100.0%	106.0%	111.5%	121.9%	124.8%
Current Assets:
Cash	100.0%	104.1%	103.4%	87.0%	90.0%
Accounts receivables	100.0%	104.4%	106.9%	126.5%	141.8%
Inventory	100.0%	105.5%	100.3%	108.5%	111.6%
Total current assets	100.0%	105.1%	102.5%	112.7%	119.5%
Current Liabilities	100.0%	111.4%	107.7%	104.6%	128.4%