1. Compute and interpret financial ratios that managers use to assess liquidity.
2. Compute and interpret financial ratios that managers use for asset management purposes.
3. Compute and interpret financial ratios that managers use for debt management purposes.

1 Lake Athletics sells two distinct product lines: Apparel and Equipment. 2 The income statement for each product line appears below. LAKE ATHLETICS Income Statement For the Year Ended December 31, 20X1 Apparel Equipment Amount Percent Amount Percent $3,150,000 1,400,000 1,750,000 800,000 $5,550,000 2,720,000 2,830,000 e Net sales o Cost of goods sold 1 Gross profit 2 Operating expenses 3 Operating income 4 Other income 875,000 1,955,000 10,000 1,965,000 491,000 950,000 20,000 970,000 5 Income before tax 6 Income tax expense 241,250 $1,474,750 $728,750 7 Net income 9 Required: 0 1. Use appropriate Excel formulas to perform vertical analysis and complete the "Percent" columns for both product lines above. Express each amount as a percentage of net sales. 2 Note: You should use absolute references in the divisors of all formulas. 3 2. Use the Excel IF function and the completed vertical analysis above to answer each of the questions below: 4 9 Required: 0 1. Use appropriate Excel formulas to perform vertical analysis and complete the "Percent" columns 1 for both product lines above. Express each amount as a percentage of net sales. 2 Note: You should use absolute references in the divisors of all formulas. 3 2. Use the Excel IF function and the completed vertical analysis above to answer each of the questions below: Which product line has the highest gross profit %? Which product line has the highest net income %? Sheeti