Comparative financial statement data of Banfield, Inc., follow: (Click the icon to view the income statements.) (Click the icon to view the balance sheets.) Income statements 1. 2. Market price of Banfield's common stock: $47.67 at December 31, 2020, and $27.84 at December 31, 2019 Common shares outstanding: 11,000,000 during 2020 and 11,000,000 during 2019 3. All sales are credit sales Read the requirements. Balance sheets 2 A B C 3 1 Banfield, Inc. 4 2 Comparative Income Statements 5 Comparative Balance Sheets December 31, 2020 and 2019 (amounts in thousands) 2020 2019 2018* 3 For the Years Ended December 31, 2020 and 2019 6 Assets 4 (amounts in thousands) 7 Current assets: Requirement 1. Compute the following ratios for 2020 and 2019. (Round all ratios to two decimal places.) 5 2020 2019 8 Cash $ 2020 2019 6 Sales revenues $ a. Current ratio 7 Less: Cost of goods sold 453,000 $ 242,000 427,500 9 Accounts receivable 95,000 $ 111,500 96,000 140,000 $102,000 220,000 10 Inventory 137,000 138,000 $214,000 2020 2019 8 Gross profit $ 211,000 $ 207,500 11 Prepaid expenses 12,000 7,000 b. Times-interest-earned ratio 9 Less: Operating expenses 137,000 130,000 12 Total current assets 10 Operating income $ 74,000 $ 77,500 2020 2019 13 Property, plant, and equipment, net 11 Less: Interest expense 10,000 12,500 c. Inventory turnover 14 Total assets $ 355,500 $ 381,000 204,000 176,000 $ 559,500 $ 557,000 12 Income before income taxes $ 64,000 $ 65,000 15 Liabilities 2020 2019 d. Operating income percentage 13 Less: Income tax expense 14 Net income $ 12,550 51,450 $ 27,850 16 Current liabilities 37,150 17 Long-term liabilities 2020 2019 18 Total liabilities $225,000 $254,000 101,500 46,000 $ 326,500 $300,000 e. Return on common stockholders' equity 19 Stockholders' equity Print Done 20 Preferred stock, 5% 2020 2019 21 Total common stockholders' equity $ 105,000 $ 105,000 128,000 152,000 $ 68,000 f. Earnings per share of common stock 22 Total stockholders' equity $ 233,000 $ 257,000 2020 2019 23 g. Price/earnings ratio Requirement 2. Decide (a) whether Banfield's ability to pay debts and to sell inventory improved or deteriorated during 2020 and (b) whether the investment attractiveness of its common stock appears to have inc a. Banfield's ability to pay its debts and to sell inventory during 2020. 25 *Selected 2018 amounts 24 Total liabilities and equity $ 559,500 $ 557,000 b. The investment attractiveness of Banfield's common stock appears to have Print Done