assignment 2.21, 2.28, 2.32, Q2.10

Question 2.32
Following table shows the sales and net income of 2017, 2018 and 2019:- Amount in $ billion
        Particulars
    2019
    2018
    2017
    Sales
    67.7
    66.8
    65.10
    Net Income
    3.9
    9.8
    10

(a) The sales have increased by 4% but the net income of the company has decreased by 61% between the years 2017 and 2019. The net profit ratio of the company in the year 2017 was 15.36% but the same fell to 5.76% in the year 2019.
(b) The following table shows the percentage of assets:-
    Assets
    2019
    % of Total Assets
    2018
    % of Total Assets
    % Change
    Current Assets
     
     
     
     
     
    Cash and cash equivalents
    4239
    3.68%
    2569
    2.17%
    65.01%
    Available-for-sale investment securities
    6048
    5.25%
    9281
    7.84%
    -34.83%
    Accounts receivable
    4951
    4.30%
    4686
    3.96%
    5.66%
     
     
     
     
     
     
    Inventories
     
     
     
     
     
    Materials and supplies
    1289
    1.12%
    1335
    1.13%
    -3.45%
    Work in process
    615
    0.53%
    588
    0.50%
    4.59%
    Finished goods
    3116
    2.71%
    2815
    2.38%
    10.69%
     
     
     
     
     
     
    Prepaid expenses and other current assets
    2218
    1.93%
    2046
    1.73%
    8.41%
    Total Current Assets
    22476
    19.53%
    23320
    19.71%
    -3.62%
     
     
     
     
     
     
    Property, Plant And Equipment, Net
    21271
    18.48%
    20600
    17.41%
    3.26%
    Goodwill
    40273
    34.99%
    45175
    38.18%
    -10.85%
    Trademarks And Other Intangible Assets
    24215
    21.04%
    23902
    20.20%
    1.31%
    Other Noncurrent Assets
    6863
    5.96%
    5313
    4.49%
    29.17%
     
     
     
     
     
     
    Total Assets
    115098
    100.00%
    118310
    100.00%
    -2.71%

The Available-for-sale investment securities have decreased by 34.83% which is a substantial decrease in important current assets. The goodwill of the company has also decreased by 10.85%
(c) The company follows the policy of financing the operations of the company through equity from the shareholders rather than debt financing as the cost of interest is a higher cost to the company when compared to the cost...