Larry is also curious about financial ratios. He would like you to explain the concept of each of the three main categories of ratios. He has provided a set of comparative financial statements and ratio calculations from the 2021 results (EXCEL APPENDIX B). From the 2022 financial statements, Larry would like you to calculate the 2022 ratios for each ratio listed from 2021. Larry wants to know how Lotus Coffee is doing compared to the previous year including any recommendations for improvement. He is particularly interested in a conclusion of how Lotus Coffee is doing under each category of ratio. As this is a huge undertaking, your brother suggests that you get a few of your friends from school to help you and to ignore all taxes for now. In appreciation, you and your friends will receive gift cards to your favourite coffee shops that serve Lotus Coffee beans. Time to call them up, convince them to help and get to work. After all, you do need coffee to study and complete all of the assignments in this college life. Case 2 Lotus Coffee - Appendix B Comparative Financial Statements and Industry Rates Lotus Coffee Comparative Income Statement Year Ended September 30 1.275.000 422220 &$2.780 2022 1,400,000 479,424 960,5761 Coffee sales Cost of goods sold Gross profit Operating expenses Sual expense General operating expense Depreciation expense Income from operations Other income and expenses Interest expense Income before income taxes 255.000 318.750 44,000 235,0301 288.000 10,000 44,000 264,576 235.000 O 268.5701 Lotus Coffee In Comparative Balance Sheet At September 10 3021 2022 Assets Cut Assets Cash Accounts receivable Materials inventory Total Current Assets 35.000 150,000 98.8812 273.581.21 30,000 120,000 107.870.4 257.870.41 Propter Plant and Equipment Land Buildings (net of depreciation) Equipment (net of depreciation Total Property. Plant and Equipment Total Assets 120,000 160,000 44.000 324.000 527.1.2 120,000 130,000 30,000 280,0001 537.870.4 O Llabilities and Shareholders' Equity Current Liabilities Line of credit Accounts payable Current portion of long-term dcbe Total Current Liabilities Non-Current Ladies Loan payable Total Liabilities 0 4.587 144.000 145.5821 144,000 144,000 300.000 485871 156.000 300,000 Shareholders' Equity Common shares Retained caring Total Shareholders' Equity Total Liabilities and Shareholders' Equity 50.000 99,294 149,294 SYNI 50,000 187,870 237,870 $17.870 Pinancial Ration Accounts receivable turnover Asset Turnover Current rutie Debe to total assets Gross profit margin Profit (Operating) margin Return onssels Working capital 2021 68 2.133 1843 75.0 069 18:49 39% 125.2942 Case #2 Lotus Coffee - Appendix B Comparative Financial Statements and Industry Ratios Lotus Coffee Inc. Comparative Income Statement Year Ended September 30 2021 1,275,000 422,220 852,7801 2022 1,440,000 479,424 960,576 Coffee sales Cost of goods sold Gross profit Operating expenses Staff expense General operating expense Depreciation expense Income from operations Other income and expenses Interest expense Income before income taxes 255.000 318,750 44,000 235,0301 288,000 360,000 44,000 268,576 0 0 235,030 268,576 Lotus Coffee Inc. Comparative Balance Sheet At September 30 2021 2022 Assets Current Assets Cash Accounts receivable Materials Inventory Total Current Assets 25,000 150,000 98,881.2 273,881.21 30,000 120,000 107,870.4 257,870.4 Proptery Plant and Equipment Land Buildings (net of depreciation) Equipment (net of depreciation) Total Property, Plant and Equipment Total Assets 120,000 160,000 44,000 324.000 597,881.21 120,000 130,000 30,000 280,000 537,870.4 Case 2 Lotus Coffee - Appendix B Comparative Financial Statements and Industry Rates Lotus Coffee Comparative Income Statement Year Ended September 30 1.275.000 422220 &$2.780 2022 1,400,000 479,424 960,5761 Coffee sales Cost of goods sold Gross profit Operating expenses Sual expense General operating expense Depreciation expense Income from operations Other income and expenses Interest expense Income before income taxes 255.000 318.750 44,000 235,0301 288.000 10,000 44,000 264,576 235.000 O 268.5701 Lotus Coffee In Comparative Balance Sheet At September 10 3021 2022 Assets Cut Assets Cash Accounts receivable Materials inventory Total Current Assets 35.000 150,000 98.8812 273.581.21 30,000 120,000 107.870.4 257.870.41 Propter Plant and Equipment Land Buildings (net of depreciation) Equipment (net of depreciation Total Property. Plant and Equipment Total Assets 120,000 160,000 44.000 324.000 527.1.2 120,000 130,000 30,000 280,0001 537.870.4 O Llabilities and Shareholders' Equity Current Liabilities Line of credit Accounts payable Current portion of long-term dcbe Total Current Liabilities Non-Current Ladies Loan payable Total Liabilities 0 4.587 144.000 145.5821 144,000 144,000 300.000 485871 156.000 300,000 Shareholders' Equity Common shares Retained caring Total Shareholders' Equity Total Liabilities and Shareholders' Equity 50.000 99,294 149,294 SYNI 50,000 187,870 237,870 $17.870 Pinancial Ration Accounts receivable turnover Asset Turnover Current rutie Debe to total assets Gross profit margin Profit (Operating) margin Return onssels Working capital 2021 68 2.133 1843 75.0 069 18:49 39% 125.2942