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 have been reported as follows over the last five years (Year 5 is the most recent year):

	Year 1			Year 2			Year 3			Year 4			Year 5
Sales	$	4,605,710		$	4,916,870		$	4,953,170		$	5,492,530		$	5,650,410
Cash	$	92,828		$	101,405		$	103,019		$	77,626		$	70,074
Accounts receivable, net		415,041			430,594			435,126			500,674			562,888
Inventory		801,067			867,590			829,359			898,159			912,101
Total current assets	$	1,308,936		$	1,399,589		$	1,367,504		$	1,476,459		$	1,545,063
Current liabilities	$	306,216		$	349,680		$	334,630		$	332,802		$	390,191

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

		Year 1	year 2	year 3	year 4	year 5
Sales		100.0%	106.8%	107.5%	119.3%	122.7%
current assets
Cash		100.0%	109.2%	111.0%	83.6%	75.5%
Account receivable		100.0%	103.7%	104.8%	120.6%	135.6%
Inventory		100.0%	108.3%	103.5%	112.1%	113.9%
total current assets		100.0%	106.9%	104.5%	112.8%	118.0%
current liabilities		100.0%	114.2%	109.3%	108.7%	127.4%
	divide each item for each respective year with the year 1 amount
	for example for sales
	for year 2 = 4916870/4605710
	for year 3 = 4953170/4605710
	similarly calculate for other heads