Problem 12-5B Calculate profitability ratios (L012-4) The following income statement and balance sheets for The Athletic Attic are provided. THE ATHLETIC ATTIC Income Statement For the year ended December 31, 2021 Net sales $8,850,000 Cost of goods sold 5,425,000 Gross profit 3,425,000 Expenses: Operating expenses $1,575,000 Depreciation expense 205,000 Interest expense 45,000 Income tax expense 355,000 Total expenses 2,180,000 Net income $1,245,000 5 ences THE ATHLETIC ATTIC Balance Sheets December 31 2021 2020 $ 159,000 765,000 1,380,000 105,000 $ 209,000 785,000 1,050,000 80,000 Assets Current assets: Cash Accounts receivable Inventory Supplies Long-term assets: Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Natec Nushin 1, 125,000 (410,000) $3, 124,000 1,125,000 (205,000) $3,044,000 $ 110,000 $ 86,000 4,500 30,500 37,500 CCA AD 550 aan c Taw MacBook Air * BO 888 aa DW 2 Homework (Algo) Saved vecember 31 2021 2020 $ 159,000 765, eee 1,380,000 185,000 $ 209,000 785,000 1,050,000 88,000 1,125,800 (410,000) $3, 124,800 1,125,000 (205,000) $3,044,000 Assets Current assets! Cash Accounts receivable Inventory Supplies Long-term assets: Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity $ $ 110, eee @ 37,500 86,000 4,5ee 30,500 550,000 550,000 650,000 1,776,500 $3,124,000 ces 650,000 1,723,000 $3,644,000 Earnings per share for the year ended December 31, 2021, are $1.31. The closing stock price on December 31, 2021, is $21.92 Required: Calculate the following profitability ratios for 2021. (Round your answers to 1 decimal place.) Profitability Ratios 1. Gross profit ratio 2 Return on assets 3 Profit margin 4 Asset turnover 5. Return on equity 6 Price earnings ratio % % % times times MacBook Air BO 888 DO Problem 12-4B Calculate risk ratios (L012-3) The following income statement and balance sheets for The Athletic Attic are provided. THE ATHLETIC ATTIC Income Statement For the year ended December 31, 2021 Net sales $8,890,000 Cost of goods sold 5,445,000 Gross profit 3,445,000 Expenses: Operating expenses $1,595,000 Depreciation expense 209,000 Interest expense 49,000 Income tax expense 359,000 Total expenses 2,212,000 Net income $1,233,000 ok ht ences THE ATHLETIC ATTIC Balance Sheets December 31 2021 2820 $ 163,000 785,000 1,400,000 109,000 $ 213,000 805,000 1,870, eee 84,000 Assets Current assets: Cash Accounts receivable Inventory Supplies Long-term assets: Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: 1,145,000 (418,000) $3, 184,000 1,145,000 (209,000) $3,188,088 $ $ 114, eee e - 39,500 90,000 4,900 30,980 no raw Hill iele Vauce Inventory Supplies Long-term assets: Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity $ 114,000 39,500 90,000 4,900 30,900 590,000 690,000 1,750,500 $3,184,600 590,000 690,000 1,702,200 $3,108,000 Required: Assuming that all sales were on account, calculate the following risk ratios for 2021. (Use 365 days a year. Round your intermediate and final answers to 1 decimal place.) Risk Ratios 1. Receivables tumover ratio 2. Average collection period 3. Inventory turnover ratio 4 Average days in inventory 5. Current ratio 6. Acid-test ratio 7 Debt to equity ratio B. Times interest eamed ratio times days times days to 1 to 1 % times