Problem 4: Financial Ratios Income Statement May 4, 2022 Sales 400,000 Ratio Formula Numbers -Answer Cost of Goods Sold (250,000) 1. Current CA Gross Profit 150,000 Operating Expenses Ratio CL (50,000) Depreciation Expense (10,000) Net Income 90,000 2. Debt Total Liabilities Ratio Total Assets Balance Sheet 3. Return on Net Income Assets 2020 2019 Diff Sales Sales Cash 145,000 50,000 95,000 Accounts Receivable 70,000 60,000 10,000 4. Return on Net Income Inventory 90,000 70,000 20,000 Assets AVG Assets Prepaid Insurance 5,000 18,000 13,000 Current Assets 310,000 198,000 212,000 5 Return on NI Equipment 70,000 Accum Depreciation (20,000) 40.000 (10,000) 10,000 30,000 Equity AVG Equity Total Assets 360,000 228,000 6. Gross Profit Gross Profit Margin Sales Liabilities 2020 2019 Diff Acounts Payable 35,000 20,000 15,000 7. Accrued Liabilities 40,000 30,000 10,000 Accts Rec Turnover Sales Avg AR Current Liabilities 75,000 50,000 Notes Payable 60,000 40,000 20,000 8. Acct Rec in 365 Total Liabilities 135,000 90,000 45,000 Days AR Turnover Stockholders' Equity 9. Inventory CGS Common Stock Retained Earnings Total Equity 47,000 30,000 178,000 108,000 70,000 225,000 138,000 17,000 Turnover Avg Inv 10. Inventory in Liabilities & Equity 360,000 228,000 Days 365 Inv Turn Dividends pd $20,000 100,000 shares outstanding 11. EPS NI #Shares