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 ATTICIncome StatementsFor the years ended December 3120222021

Net sales$10,400,000$8,800,000

Cost of goods sold6,800,0005,400,000

Gross profit3,600,0003,400,000

Expenses:

Operating expenses1,600,0001,550,000

Depreciation expense200,000200,000

Interest expense40,00040,000

Income tax expense400,000350,000

Total expenses2,240,0002,140,000

Net income$1,360,000$1,260,000

THE ATHLETIC ATTICBalance SheetsDecember 31202220212020

Assets

Current assets:

Cash $225,000 $154,000 $204,000

Accounts receivable990,000 740,000 760,000

Inventory1,725,000 1,355,000 1,025,000

Supplies130,000 100,000 75,000

Long-term assets:

Equipment1,100,0001,100,0001,100,000

Less: Accumulated depreciation(600,000)(400,000)(200,000)

Total assets $3,570,000$3,049,000$2,964,000

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $175,000$105,000$81,000

Interest payable 4,00004,000

Income tax payable 40,00035,00030,000

Long-term liabilities:

Notes payable500,000500,000500,000

Stockholders' equity:

Common stock 600,000600,000600,000

Retained earnings 2,251,0001,809,0001,749,000

Total liabilities and stockholders' equity $3,570,000$3,049,000$2,964,000

Problem 12-6B Part 1

Required:

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

Receivables turnover ratio

Inventory Turnover ratio

current ratio

Debt to equity ratio

Gross profit ratio

return on assets

profit margin

asset turnover