A B 3 14 15 16 Liquidity ratios: 17 Current ratio 18 Quick ratio D 1) Ratios 2) Grade Industry 2019 2020 2019 2020 Standards 5.00 3.00 19 20 Activity ratios: 21 Inventory turnover 2.20 22 Days sales outstanding 90.00 23 Fixed asset turnover 1.00 24 Total asset turnover 0.75 25 26 Profitability ratios: 27 Gross profit margin 28 Operating profit margin 20% 29 Return on equity 9% 30 31 Leverage ratios: 0.33 32 Debt ratio 33 34 Coverage ratios: 35 Times-interest-earned 36 37 38 DATA 7.00 39 Balance Sheet 40 Assets: 41 Cash 2019 2020 $200 $150 43 Inventory 44 42 Account Receivables Current assets 450 425 550 625 1,200 1,200 45 Plant and equip. 2,200 2,600 46 Less: Acc dep 1,000 1,200 47 Net plant and equip 1,200 1,400 46 Total assets $2,400 $2,600 49 50 51 Labilities and Owners' Equity 2019 2020 6:23 PM 01/19/2022 Ready Ratio Analysis 4 Good Poor Poor C21 37 B 38 DATA 2020 2019 39 Balance Sheet 40 Assets: $200 $150 41 Cash 450 425 42 Account Receivables 550 625 43 Inventory 1,200 1,200 44 Current assets 2,200 2,600 45 Plant and equip. 1,000 1,200 46 Less: Acc dep 47 Net plant and equip. 1,200 1,400 48 Total assets $2,400 $2,600 49 50 51 Liabilities and Owners' Equity: 2019 2020 52 Accts/Pay $200 $150 53 Notes Pay-Current 0 150 54 Current liabilities 200 300 55 Bonds 600 600 56 Owners' equity 57 Common stock 300 300 58 Paid-in Capital 600 600 50 Retained earnings 700 800 60 Total owners' equity 1,600 1,700 61 Total liabilities and owners' equity 62 owners' equity $2,400 $2,600 63 64 Income Statement: 2019 65 Sales 2020 $1,200 66 COGS $1,450 700 67 Gross profit 850 68 Operating expenses 500 600 Depreciation 30 40 70 Net operating income 220 200 71 Interest expense 250 360 72 Net income before tax 50 64 73 Taxes (21%) 200 296 14 Net income 42 62 75 $158 $234 76 634958 91/19/2022ty Ratio Analysis D