Knicherdoodles, Inc. 20X1 20X2 Sales (all credit) $740 $785 COGS 430 440 Operating Exp (Excluding Depreciation) 150 160 Interest Dividends Depreciation Expense 100 33 35 Industry averages ratios 20X1 20X2 (360 day year) Current ratio 4.1 ? ? Quick ratio 2.1 ? 2 A/R collection period 47 ? 2 Inventory turnover 2.1 ? ? Total asset turnover 0.35 2 2 Fixed asset turnover 0.45 2 ? Gross margin 41.20%? ? Operating margin 11.10% ? ? Times interest earned 4.3x ? ? 16 17 110 Cash 70 75 563 502 390 405 662 640 Accounts receivables Accounts payable Inventory Long-term debt Net fixed assets Total Assets Common stock 340 410 1,680 1,413 2,960 2,983 700 235 Tax rate 35% 35% The CEO of Knickerdoodles makes the following statements: The firm faced new competition from low-cost, start-up firms during 20x2 The firm's operating performance is significantly better than the industry The firm's ability to service outstanding debt has eroded during 20x2 Net margin has improved Given the data, how many of the CEO's statement appear to be correct? (assume that the data provided includes all income statement information) 0 1 02. 3