Preparation of Ratios Twisted Company owns and operates a small chain of pretzel stands located near colleges and universities. Twisted has experienced significant growth in recent years. The following data are available for Twisted:

Use the above financial statements to respond to the following requirements. Required: 1. Conceptual Connection: Compute the asset efficiency ratios for Twisted for 2013 and 2012. Round your answers to two decimal places. 2013 2012 Accounts receivable turnover ratio Inventory turnover ratio Asset turnover ratio Indicate whether efficiency has changed. 2. Conceptual Connection: Compute the profitability ratios for Twisted for 2013 and 2012. In your computations, round the tax rate to two decimal places (ie: .4693 would be .47). Round all your final answers to two decimal places. 2013 2012 Gross profit percentage % % Operating margin percentage % % Net profit margin percentage % % Return on Assets % % Return on Equity % % Determine by how much Twisted's profitability ratios have changed (in percentage terms) during the 2-year period. 3. Conceptual Connection: Compute the debt management ratios for Twisted for 2012 and 2013. Round your answers to two decimal places. 2013 2012 Times interest earned ratio (Accrual Basis) Long-term debt to equity ratio Debt to equity ratio Long-term debt to total assets Total debt to assets ratio

Twisted Company Consolidated Income Statements (in thousands) Year ended December 31, 2013 2012 2011 $51,638 Sales $41,310 $34,425 20,700 Cost of goods sold 31,050 24,840 $20,588 $16,470 $13,725 Gross margin Other income, net 383 426 405 $20,971 $16,896 $14,130 Costs and expenses $11,350 $13,465 Selling and administrative $16,570 1,237 765 554 nterest Total costs and expenses $17,807 $14,230 $11,904 Income before income taxes 3,164 2,666 2,226 Provision for income taxes 885 746 623 2,279 1,920 1,603 Net income Twisted Company Consolidated Balance Sheets (in thousands) December 31, 2013 2012 2011 ASSETS Current assets: Cash 360 293 236 Accounts receivable 4,658 3,690 3,285 Inventories 6,064 4,478 3,442 Total cument assets $11,082 8,461 6,963 Property, plant, and equipment (net) 4,860 3,600 2,756 Other assets 574 585 562 Total assets $16,516 $12,646 $10,281 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: 1,620 Short-tem notes payable 4,230 450 Accounts payable 1,147 1,013 720 Total cument liabilities 5,377 2,633 1,170 Long-term debt 3,150 3,150 3,150 Total liabilities 8,527 5,783 4,320 Common stock &additional paid-in capital 4,725 4,725 4,725 3,264 Retained eamings 2,138 1,236 Total stockholders' equity 7,989 6,863 5,961 Total liabilities and stockholders' equity $16,516 $12,646 $10,281