1 The 2020 financial statements of Outdoor Waterworks Inc. follow Outdoor Waterworks Inc. Print Income Statement For Year Ended December 31, 2020 Net sales $1,126,000 Cost of goods sold: $ 83,360 616,840 Inventory, Dec. 31, 2019 Purchases Goods available for sale Inventory, Dec. 31, 2020 Cost of goods sold Gross profit from sales Operating expenses Operating profit Interest expense Profit before taxes Income taxes Profit $ 700,200 61,440 638,760 $ 487,240 289,360 $ 197,880 13,000 $ 184,880 19,664 $ 165,216 Assets Cash Outdoor Waterworks Inc. Balance Sheet December 31, 2020 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 Total liabilities and equity $518,080 Assume all sales were on credit. Also assume the long-term note payable is due in 2023, with no current portion. On the December 31, 2019, balance sheet, the assets totalled $440,720, common shares were $200,000, and retained earnings were $112,440. Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.) a. Current ratio i b. Quick ratio c Days' sales uncollected d Inventory turnover e. Days' sales in inventory f. Ratio of pledged plant assets to secured liabilities g Times Interest eamed to 1 to 1 days times days to 1 times h Profit margin % Total asset turnover times Return on total assets % k Return on common shareholders' equity % Print g. Times interest earned h. Profit margin iTotal asset turnover j. Return on total assets times % times k. Return on common shareholders' equity % Analysis Component: Identify whether the ratios calculated above are favourable or unfavourable to the industry averages. a. Current ratio b. Quick ratio c Days' sales uncollected d. Inventory turnover e. Days' sales in inventory f. Ratio of pledged plant assets to secured liabilities g Times interest eamed h. Profit margin Total asset turnover Industry Average 1.6.1 1.1.1 21 days 5 times 70 days 1.4.1 50 times 14 % 2.3 times Return on total assets 20 % k Return on common shareholders' equity 32.7 %