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1 THE ATHLETIC ATTIC Income Statement For the year ended December 31, 2021 Net sales $8,710,000 Cost of goods sold 5,355,000 Gross profit 3,355,000 Expenses: Operating expenses $1,505,000 Depreciation expense 191,000 Interest expense 31,000 Income tax expense 341,000 Total expenses 2,068,000 Net income $1,287,000 2020 $ 195,000 715,000 980,000 66,000 THE ATHLETIC ATTIC Balance Sheets December 31 2021 Assets Current assets: Cash $ 145,000 Accounts receivable 695,000 Inventory 1,310,000 Supplies 91,000 Long-term assets: Equipment 1,055,000 Less: Accumulated depreciation (382,000) Total assets $2,914,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 96,000 Interest payable 0 Income tax payable 30,500 Long-term liabilities: Notes payable 410,000 Stockholders' equity: Common stock 510,000 Retained earnings 1,867,500 Total liabilities and stockholders' equity $2,914,000 1,055,000 (191, 000) $2,820,000 $ 72,000 3,100 29, 100 410,000 510,000 1,795,800 $2,820,000 Required: Assuming that all sales were on account, calculate the following risk ratios for 2021. (Use 365 days a year. Round your intermediate and final answers to 1 decimal place.) 6.4 times 57.0 days 4.6 times Risk Ratios 1. Receivables turnover ratio 2. Average collection period 3. Inventory turnover ratio 4. Average days in inventory 5. Current ratio 6. Acid-test ratio 7. Debt to equity ratio 18. Times interest earned ratio 79.0 days to 1 to 1 % times Perform a horizontal analysis providing both the amount and percentage change. (Round Percentage answers to 1 decimal place. Decreases should be indicated by a minus sign.) Cash Accounts receivable Inventory Long-term assets Total assets Year 2021 2020 $ 281,940 $ 740,000 349,160 140,000 727,680 640,000 3,297,280 2,240,000 $4,656,060 $3,760,000 Increase (Decrease) Amount % Cash Accounts receivable Inventory Long-term assets Total assets