The 2023 financial statements of Outdoor Waterworks Inc. follow:

Outdoor Waterworks Inc.

Income Statement

For Year Ended December 31, 2023

Net sales

Cost of goods sold:

$1,126,000

Inventory, Dec. 31, 2022

$

Purchases

83, 360

Goods available for sale

616,840

Inventory, Dec. 31, 2023

$ 700,200

61,440

Cost of goods sold

638, 760

Gross profit from sales

$

487,240

Operating expenses

289, 360

Operating profit

$

197,880

Interest expense

13,000

Profit before taxes

$

184,880

Income taxes

19, 664

Profit

$

165,216

Outdoor Waterworks Inc.

Balance Sheet

December 31, 2023

Assets

Cash

Current non-strategic investments

Accounts receivable, net

Notes receivable

Inventory

Prepaid expenses

Plant and equipment, net

Total assets

Liabilities and Equity

Accounts payable

Accrued wages payable

Income taxes payable

Long-term note payable, secured by mortgage on

plant

Common shares, 160,000 shares

Retained earnings

Total liabilities and equity

$ 23,800

26,400

53, 680

12,160

61, 440

6,080

334,520

$518,080

$ 49,480

6,560

7,440

118,800

200,000

135,800

$518,080

Assume all sales were on credit. Also assume the long-term note payable is due in 2026, with no current portion. On the December 2022, balance sheet, the assets totalled $440,720, common shares were $200,000, and retained earnings were $112,440.

Required:

places.)

Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal

1. Current ratio
2. Quick ratio
3. Days' sales uncollected
4. Inventory turnover
5. Days' sales in inventory
6. Ratio of pledged plant assets to secured liabilities
7. Times interest earned h. Profit margin

i. Total asset turnover Return on total assets

k. Return on common shareholders' equity

to 1

to 1

days

times davs to 1 times

%

times

%

Analysis Component:

Identify whether the ratios calculated above are favourable or unfavorable to the industry averages.

Ices

1. Current ratio
2. Quick ratio
3. Days' sales uncollected
4. Inventory turnover
5. Days' sales in inventory
6. Ratio of pledged plant assets to secured liabilities
7. Times interest earned
8. Profit margin Total asset turnover

j.

Return on total assets

k. Return on common shareholders' equity

Industry

Average

1.6:1

1.1:1

21 days

5 times

70 days

1.4:1

50 times

14%

2.3 times

20%

32.7 %