S The 2020 financial statements of Outdoor Waterworks Inc. follow: Outdoor Waterworks Inc. Income Statement For Year Ended December 31, 2020 Net sales Cost of goods sold: Inventory, Dec. 31, 2019 Purchases Goods available for sale Inventory, Dec. 31, 2020 Cost of goods sold Gross profit from sales Operating expenses Operating profit Interest expense Profit before taxes Income taxes Profit $1,066,000 $ 80,360 610,840 $ 691,200 60,540 630,660 $ 435,340 283,360 $ 151,980 12,400 $ 139,580 19,364 $ 120,216 Assets Cash Outdoor Waterworks Inc. Balance Sheet December 31, 2020 Current non-strategic investments Accounts receivable, net Notes receivable Inventory Prepaid expenses Plant and equipment, net Total assets 23,200 25,680 53,080 11,560 60,540 5,960 331,520 $511,540 B Outdoor Waterworks Inc. Balance Sheet December 31, 2020 Assets Cash Current non-strategic investments Accounts receivable, net Book Print erences Notes receivable. Inventory Prepaid expenses Plant and equipment, net Total assets Liabilities and Equity Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant Common shares, 160,000 shares Retained earnings Total liabilities and equity $ 23,200 25,680 53,080 11,560 60,540 5,960 331,520 $511,540 $49,240 6,440 7,260 117,000) 197,000 134,600 $511,540 Assume all sales were on credit. Also assume the long-term note payable is due in 2023, with no current portion On the December 31, 2019, balance sheet, the assets totalled $437,720, common shares were $197,000, and retained earnings were $110,640. Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.) Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 dec places.) a Current ratio b Quick ratio c. Days' sales uncollected d Inventory turnover 2 86 to 1 1.80 to 1 days times days e Days' sales in inventory f Ratio of pledged plant assets to secured liabilities g Times interest earned to 1 times. h. Profit margin Total asset turnover Return on total assets k Return on common shareholders' equity % times % % Analysis Component: Identify whether the ratios calculated above are favourable or unfavourable to the industry averages. ok ht a Current ratio b Quick ratio ences Industry Average 1.6.1 1.1.1 c. Days' sales uncollected d. Inventory turnover e Days' sales in inventory f Ratio of pledged plant assets to secured liabilities 141 g Times interest earned h. Profit margin Total asset turnover. 21 days 5 times 70 days 50 times 14 % 23 times Return on total assets 20 % k Return on common shareholders' equity 32.7 %