Current Attempt in Progress

Ayayai Corporation was formed $5$ years ago through a public subscription of common stock. Daniel Brown, who owns $15\%$ of the

common stock, was one of the organizers of Ayayai and is its current president. The company has been successful, but it currently is

experiencing a shortage of funds. On June $10,2021,$ Daniel Brown approached the Topeka National Bank, asking for a $24-$month

extension on two $$34,920$ notes, which are due on June $30,2021,$ and September $30,2021.$ Another note of $$5,970$ is due on March

$31,2022,$ but he expects no difficulty in paying this note on its due date. Brown explained that Ayayai's cash flow problems are due

primarily to the company's desire to finance a $$300,720$ plant expansion over the next $2$ fiscal years through internally generated

funds.

The commercial loan officer of Topeka National Bank requested the following financial reports for the last $2$ fiscal years.

${?}^a$ Cash dividends were paid at the rate of $$1$ per share in fiscal year $2020$ and $$2$ per share in fiscal year $2021.$ Question $3$ of $6$

$\frac{-}{1}$

$\backslash$table$[[\backslash$table$[[$Ayayai Corporation$],[$Income Statement$],[$For the Fiscal Years Ended March $31]]],[,021,2020],[$Sales revenue,$$2,992,720,$$$2,693,360],[$Cost of goods sold $^($a$),1,514,810,1,418,870],[$Gross margin,$1,477,910,1,274,490],[$Operating expenses,$856,040,775,840],[$Income before income taxes,$621,870,498,650],[$Income taxes $(40\%),248,748,199,460],[$Net income,$$373,122,$$$299,190]]$

${?}^a$ Depreciation charges on the plant and equipment of $$100,020$ and $$102,710$ for fiscal years ended March $31,2020$ and $2021,$ respectively, are included in cost of goods sold.

$($a$)$

Compute the following items for Ayayai Corporation. $($Round answers to $2$ decimal places, e$.$g$.2\mathrm{.}25$ or $2\mathrm{.}25\%.)$

Current ratio for fiscal years $2020$ and $2021.$

Acid$-$test $($quick$)$ ratio for fiscal years $2020$ and $2021.$

Inventory turnover for fiscal year $2021.$

Return on assets for fiscal years $2020$ and $2021.($Assume total assets were $$1,682,280$ at $\frac{3}{31}\frac{?}{19}.)$

Percentage change in sales, cost of goods sold, gross margin, and net income after taxes from fiscal year $2020$ to $2021.$

$2020$

$2021$

Current ratio

:$1$

:$1$

Acid$-$test $($quick$)$ ratio

:$1,$:$1$

Inventory turnover

times

Return on assets

$\%$

$\%$

Percent Changes

Percent Increase

Sales revenue

$\%$

Cost of goods sold

$\%$

Gross margin

$\%$

Net income after taxes

$\%$

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