Question 2: Profitability Ratios 2. Calculate the following Profitability Ratios 2021 Additional Information (a) (b) Chicago Cereal Company Balance Sheets December 31 (in thousands) Assets 2022 Current assets Cash $ 524 Accounts receivable 1,026 Inventory 924 Prepaid expenses and other current assets 243 Total current assets 2,717 Property assets (net) 2,990 Intangibles and other assets 5,690 Total assets $11,397 Llabilities and Stockholders' Equity Current liabilities $ 4,044 Long-term liabilities 4,827 Stockholders' equity-common 2.526 Total liabilities and stockholders' equity $11,397 2 Assume that average total assets for 2020 are $9589 Assume that the company has 1000 weighted average shares Assume that preferred dividends are $300 for 2022 and $250 for 2021 Assume that the market price of each share is $5 (d) *** ***** *** $10,714 Earnings per share $10,714 Net income-Preferred dividends Weighted average common shares outstanding Market price per share Earnings per share Price-earnings ratio Gross profit rate Gross profit Net sales Profit margin Net income Net sales Return on assets Net income Average total assets Chicago Cereal Company Condensed Income Statements For the Years Ended December 31 (in thousands) 2022 2021 Net sales $11,776 $10,907 Cost of goods sold 6,597 6,082 Gross profit 5,179 4,825 Selling and administrative expenses 3,311 3,059 Income from operations 1,868 1,766 Interest expense 321 294 Income before income taxes 1,547 1,472 Income tax expense 444 468 Net income $ 1,103 $ 1,004