For the following ratios: 1) calculate the ratio (show all variables in calculation and ensure units are indicated) (3 marks each) 2) provide one sentence on significance of ratio (2 marks each) 3) Provide one sentence to compare it to the industry ratio and explain why it is better or worse than industry. (2 marks each) Indoor Drywall inc Income Statement For the Year Ended December 31, 2020 Indoor Drywall inc. Balance Sheet 31-Dec-20 Net Sales 5970,000 $25,000 Cost of goods sold: Inventory, Dec 31, 2019 Purchases Goods available for sale Inventory, Dec 31, 2020 Cost of Goods Sold $75,000 601,000 676,000 60,000 616,000 Assets Cash Current non-strategic investments Accounts receivable, net Notes receivable Inventory Prepaid expenses Plant and equipment, net Total assets 20,000 50,000 11,000 60,000 6,000 330,000 $502,000 Gross profit from sales $354,000 Operating expenses Operating profit 270,000 $84,000 Liabilities and Equity Accounts payable $50,000 Interest expense Profit before taxes Income taxes Profit 12,000 $72,000 20,000 $52,000 6,000 7,000 Accrued wages payable Income taxes payable Long term not payable, secured by mortage on plant Common shares, 160,000 Retained earnings Total liabilities and equity 120,000 190,000 129,000 $502,000 Note: Beginning asset balance was 432,720 Beginning retained earnings 107,640 Beginning common share capital 190,000 Long term mortgage is secured by plant and equipment a) b) c) Current ratio Current Assets Current Liabilities Quick ratio Cash and equivalents + Accounts Receivable Notes Receivable Current Liabilities Days sales uncollected Accounts receivable at the end of the year 365 Credit sales for the year Inventory turnover COGS Average inventory balance Days sales inventory Ending inventory X 365 COGS d) e) f) ratio of pledged plant assets to secured liabilities 8) times interest earned: Operating profit before interest and taxes Interest expense h) Profit margin Profit Net sales i) Total asset turnover Net Sales Average Total Assets Murturn on total assets Profit Average Total Assets Return on common shareholder's equity Profit Average common share equity Format B IV - Add a File Record Audio Record Video DELL 9 6 5 7 8 9 O P T T G K L N