E13.18 (LO 4) (Ratio Computations and Analysis) Prior Company's condensed financial state- ments provide the following information. Bonds payable Cash Accounts receivable (net) Short-term investments Inventory Prepaid expenses Total current assets Property, plant, and equipment (net) Total assets Current liabilities Common stockholders' equity Prior Company Balance Sheet Dec. 31, 2020 Dec. 31, 2019 $ 52,000 $ 60,000 198,000 80,000 80,000 40,000 440,000 360,000 7,000 3,000 $ 773,000 857,000 $1,630,000 $ 547,000 853,000 $1,400,000 240,000 160,000 400,000 400,000 990,000 840,000 Total liabilities and stockholders' equity $1,630,000 $1,400,000 Income Statement For the Year Ended 2020 Sales revenue Cost of goods sold Gross profit Selling and administrative expenses Interest expense Net income Instructions a. Determine the following for 2020. 1. Current ratio at December 31. 2. Acid-test ratio at December 31. 3. Accounts receivable turnover. $1,640,000 (800,000) 840,000 (440,000) (40,000) $ 360,000 4. Inventory turnover. 5. Return on assets. 6. Profit margin on sales. b. Prepare a brief evaluation of the financial condition of Prior Company and of the adequacy of its profits. F13 10 1