Problem 12-6B Use ratios to analyze risk and profitability (LO12-3, 12-4)

[The following information applies to the questions displayed below.] Income statement and balance sheet data for The Athletic Attic are provided below.

THE ATHLETIC ATTIC
Income Statements
For the years ended December 31
		2022			2021
Net sales	$	10,400,000		$	8,900,000
Cost of goods sold		6,800,000			5,450,000
Gross profit		3,600,000			3,450,000
Expenses:
Operating expenses		1,600,000			1,600,000
Depreciation expense		200,000			210,000
Interest expense		40,000			50,000
Income tax expense		400,000			360,000
Total expenses		2,240,000			2,220,000
Net income	$	1,360,000		$	1,230,000

THE ATHLETIC ATTIC
Balance Sheets
December 31
		2022				2021				2020
Assets
Current assets:
Cash	$	225,000			$	164,000			$	214,000
Accounts receivable		990,000				790,000				810,000
Inventory		1,725,000				1,405,000				1,075,000
Supplies		130,000				110,000				85,000
Long-term assets:
Equipment		1,100,000				1,150,000				1,150,000
Less: Accumulated depreciation		(600,000	)			(420,000	)			(210,000	)
Total assets	$	3,570,000			$	3,199,000			$	3,124,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	175,000			$	115,000			$	91,000
Interest payable		4,000				0				5,000
Income tax payable		40,000				40,000				31,000
Long-term liabilities:
Notes payable		500,000				600,000				600,000
Stockholders' equity:
Common stock		600,000				700,000				700,000
Retained earnings		2,251,000				1,744,000				1,697,000
Total liabilities and stockholders equity	$	3,570,000			$	3,199,000			$	3,124,000

Problem 12-6B Part 1

Required: 1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.)