Note: only partial balance sheet information provided do not "average" balance sheet data when calculating ration; the 20X1 and 20x2 ratio columns are for your convenience when answering the questions and will not be graded Knicherdoodles, Inc. Industry averages ratios 20X1 20X2 20x120x2 (360 day year) Sales (all credit) $740 5785 Current ratio COGS 430 440 Quick ratio 2.1 Operating Exp (Excluding Depreciation) 150 160 A/R collection period 47 Interest Inventory turnover 4.1 7 7 2 2 2 2 35 35 2.1 2 2 Dividends 16 17 Total asset tumover 0.35 2 2 Depreciation Expense 100 110 Fixed asset turnover 0.45 2 2 Cash 70 75 Grossmann 41.20% > Accounts receivables 563 S02 7 Operating margin 11.10 Times interesteamed 48 Accounts payable 390 405 Inventory 662 640 Long-term debt 540 410 Net fixed assets 1,680 1415 Total Assets 2,960 2,983 700 255 Common stock Tax rate 35%.35% The CEO of Knickerdoodles make the following statements Cash 70 75 Gross margin 41.20% ? 2 563 502 Operating margin 11.10% 2 7 390 405 Times interest earned 4.3x 2 2 Accounts receivables Accounts payable Inventory Long-term debt 662 640 340 410 Net fixed assets 1,680 1413 Total Assets 2,960 2,983 Common stock 700 235 Tax rate 35% 35% The CEO of Knickerdoodles makes the following statements The firm faced new competition from tow.cost, start-up firms during 2012 The firm's operating performance is significantly better than the industry The tum's ability to service outstanding debt has eroded during 2012 Ne 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)