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	$	4,601,270		$	4,897,930		$	5,118,700		$	5,510,220		$	5,778,750
Cash	$	88,540		$	97,890		$	94,214		$	78,232		$	77,351
Accounts receivable, net		418,193			419,393			437,761			515,351			576,719
Inventory		801,902			880,170			822,958			893,920			899,522
Total current assets	$	1,308,635		$	1,397,453		$	1,354,933		$	1,487,503		$	1,553,592
Current liabilities	$	300,057		$	335,370		$	335,797		$	330,208		$	408,998

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).)

Year 1Year 2Year 3Year 4Year 5Sales%%%%%Current assets:Cash%%%%%Accounts receivable%%%%%Inventory%%%%%Total current assets%%%%%Current liabilities%%%%%

Answer 1

		Year 1	Year 2	Year 3	Year 4	Year 5
	Sales	$ 4,601,270	$ 4,897,930	$ 5,118,700	$ 5,510,220	$ 5,778,750
	Cash	$      88,540	$      97,890	$      94,214	$      78,232	$      77,351
	Accounts receivable, net	418,193	419,393	437,761	515,351	576,719
	Inventory	801,902	880,170	822,958	893,920	899,522
	Total current assets	$ 1,308,635	$ 1,397,453	$ 1,354,933	$ 1,487,503	$ 1,553,592
	Current liabilities	$    300,057	$    335,370	$    335,797	$    330,208	$    408,998
Ans	as trend %
		Year 1	Year 2	Year 3	Year 4	Year 5
	Sales	100.0%	106.4%	111.2%	119.8%	125.6%
	Cash	100.0%	110.6%	106.4%	88.4%	87.4%
	Accounts receivable, net	100.0%	100.3%	104.7%	123.2%	137.9%
	Inventory	100.0%	109.8%	102.6%	111.5%	112.2%
	Total current assets	100.0%	106.8%	103.5%	113.7%	118.7%
	Current liabilities	100.0%	111.8%	111.9%	110.0%	136.3%
	Trend formula =	Year 1 value / Year 1 value	Year 2 value / Year 1 value	Year 3 value / Year 1 value	Year 4 value / Year 1 value	Year 5 value / Year 1 value
	In brief =	(Year N value/ base year value) x 100
		Here N = 1 to 5
		Base year is year 1
	Example for sales	(4601270/4601270) x 100 = 100%	(4897930/4601270) x 100 = 106.4%	(5118700/4601270) x 100 = 111.2%	(5510220/4601270) x 100 = 119.8%	(5778750/4601270) x 100 = 125.6%
	Cash	(88540/88540) x100 = 100%	(97890/88540) x100 = 110.6%	(94214/88540) x100 = 106.4%	(78232/88540) x100 = 88.4%	(77351/88540) x100 = 87.4%
	I am leaving other values as example for your practice understanding, answer for your reference is given