Problem 13-04A a1,b (Video) The following financial information is for Oriole Company. Oriole Company Balance Sheets December 31 Assets Cash Debt investments (short-term) Accounts receivable Inventory Prepaid expenses Land 2020 $ 70,000 51,000 107,000 234,000 26,000 135,000 261,000 $884,000 2019 $ 69,000 40,000 92,000 167,000 23,000 135,000 184,000 $710,000 Building and equipment (net) Total assets Liabilities and Stockholders' Equity Notes payable Accounts payable Accrued liabilities Bonds payable, due 2023 Common stock, $10 par Retained earnings Total liabilities and stockholders' equity $172,000 66,000 42,000 251,000 204,000 149,000 $884,000 $ 106,000 52,000 42,000 170,000 204,000 136,000 $710,000 Oriole Company Income Statements For the Years Ended December 31 2020 2019 Sales revenue $882,000 $781,000 Cost of goods sold 641,000 574,000 Gross profit 241,000 207,000 Operating expenses 190,000 160,000 Net income $ 51,000 $ 47,000 Additional information: 1. 2. 3. 4. Inventory at the beginning of 2019 was $117,000. Accounts receivable (net) at the beginning of 2019 were $88,000. Total assets at the beginning of 2019 were $631,000. No common stock transactions occurred during 2019 or 2020. All sales were on account. 5. (a1) Compute the liquidity and profitability ratios of Oriole Company for 2019 and 2020. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If % change is a decrease show the numbers as negative, e.g. -1.83% or (1.83%).) 2019 2020 % Change LIQUIDITY Current ratio :1 :1 % Accounts receivables turnover times times % Inventory turnover times times % 2019 2020 % Change PROFITABILITY Profit margin % % % Asset turnover times times % Return on assets % % % Earnings per share % $ $ (b) The following are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2020, and (2) as of December 31, 2021, after giving effect to the situation. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If % change is a decrease show the numbers as negative, e.g. -1.83% or (1.83%).) Situation 19,000 shares of common stock were sold at par on July 1, 2021. Net income for 2021 was $55,000. 1. Ratio Return on common stockholders' equity Debt to assets ratio 2. All of the notes payable were paid in 2021. All other liabilities remained at their December 31, 2020, levels. At December 31, 2021, total assets were $885,000. The market price of common stock was $9.00 and $12.00 on December 31, 2020 and 2021, respectively. Net income for 2021 was $55,000. 3. Price-earnings ratio 2020 2021 % Change Return on common stockholders' equity % % % Debt to assets ratio % % % Price earnings ratio times times %