Problem 12-5B Calculate profitability ratios (LO12-4) 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 Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Interest expense Income tax expense Total expenses Net income $1,550,000 200,000 40,000 350,000 $8,800,000 5,400,000 3,400,000 2,140,000 $1,260,000 THE ATHLETIC ATTIC Balance Sheets December 31 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 2021 2020 $ 154,000 740,000 1,355,000 100,000 1,100,000 (400,000) $3,049,000 $ 204,000 760,000 1,025,000 75,000 1,100,000 (200,000) $2,964,000 $ 105,000 81,000 0 4,000 35,000 30,000 500,000 500,000 600,000 1,809,000 600,000 1,749,000 $3,049,000 $2,964,000 Earnings per share for the year ended December 31, 2021, are $1.26. The closing stock price on December 31, 2021, is $21.42. 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 3.9 % % 1.3 % 4. Asset turnover 5. Return on equity 6. Price-earnings ratio 21.4 times 53.0 % 17.0 times