REQUIRED 1

REQUIRED 2

Income statement and balance sheet data for The Athletic Attic are provided below. 2 THE ATHLETIC ATTIC Income Statements For the years ended December 31 2022 Net sales $12,780,000 Cost of goods sold 8,330,000 Gross profit 4,450,000 Expenses: Operating expenses 1,770,000 Depreciation expense 200,000 Interest expense 57 , Income tax expense 604,000 Total expenses 2,631,000 Net income $ 1,819,000 2021 $11,350,000 7 , 1 , 4,250,000 1,720,000 2 57,000 520,000 2,497,000 $ 1,753,000 THE ATHLETIC ATTIC Balance Sheets December 31 2022 2021 2020 $ 242,080 1, 7 , 1,742,000 147,000 $ 172,000 757,000 1,372, 090 117,000 $ 238,000 777, eee 1, 42 , 92,000 Assets Current assets: Cash Accounts receivable Inventory Supplies Long-term assets: Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: 1,780, eee (770, eee) $4, 148,000 1,780,000 (570,000) $3,628,000 1,780,000 (370, eee) $3,559,00 $ 157, eee $ 224,300 5,700 57, eee $ 147,308 5,700 47,eee 52,000 December 1 2022 2021 2020 $ 242,000 1,007,000 1,742,000 147,000 $ 172,000 757,000 1,372,000 117,000 $ 238,000 777,000 1,042,000 92,000 1,780,000 (770,000) $4,148,000 1,780,000 (570,000) $3,628,000 1,780,000 (370,000) $3,559,000 Assets Current assets: Cash Accounts receivable Inventory Supplies Long-term assets: Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity $ 157,000 $ 224,300 5,700 57,000 $ 147,300 5,700 47,000 52,000 670,000 670,000 670,000 770,000 2,421, eee $4, 148,000 770,000 770,000 1,979,800 1,919,000 $3,628,000 $3,559,000 Required: 1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.) 2021 2022 times times Receivables turnover ratio Inventory turnover ratio Current ratio Debt to equity ratio times times to 1 % to 1 % , 1,607,000 1, 742,000 147,000 1,372,000 117,000 717,00 1,842,000 92,000 1,780,000 (770,000) $4, 148,000 1,78 , (570,000) $3,628,000 1,780,000 (370,000) $3,559,000 ACCOunts receivable Inventory Supplies Long-term assets: Equipment Less: Accumulated depreciation Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity $ 157,000 $ 224,300 5,700 57,000 $ 147,300 5,700 47,000 52,000 670,000 670,000 670,000 770,000 2,421, eee $4, 148,000 770,000 1,979,000 $3,628,000 770,000 1,919,000 $3,559,000 2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.) Gross profit ratio Return on assets Profit margin Asset turnover 2021 % % % 2022 % % % times times