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	$	4,530,290		$	4,828,900		$	5,076,200		$	5,518,600		$	5,737,610
Cash	$	85,801		$	88,621		$	86,365		$	84,038		$	80,023
Accounts receivable, net		415,092			420,152			438,116			509,208			564,786
Inventory		805,831			876,813			830,205			888,864			900,917
Total current assets	$	1,306,724		$	1,385,586		$	1,354,686		$	1,482,110		$	1,545,726
Current liabilities	$	313,767		$	343,492		$	332,614		$	326,908		$	397,209

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

Answer 1

Trend percentages of each year will be calculated by dividing the current year value by base year value.

	Year-1	%	Year-2	%	Year-3	%	Year-4	%	Year-5	%
	(Base Year)
Sales	4,530,290	100	4,828,900	106.6	5,076,200	112	5,518,600	122	5,737,610	127
Current Assets:
Cash	85,801	100	88,621	103.3	86,365	100.7	784,038	98	80,023	93.3
Accounts receivable, net	415,092	100	420,152	101.2	438,116	105.5	509,208	122.7	564,786	136.1
Inventory	805,831	100	876,813	108.8	830,205	103	888,864	110.3	900,917	111.8
Total current assets	1,306,724	100	1,385,586	106	1,354,686	103.7	1,482,110	113.4	1,545,726	118.3
Current liabilities	313,767	100	343,492	109.5	333,614	106.3	326,908	104.2	397,209	126.6