Small Business Finance - BUSG 1341- Homework-Chapter 4 Evaluate, in complete sentences, the company's leverage and profitability ratios, and compare to industry standards and to previous years. Walnut Grove Company Income Statement Data From January 1 through December 31, 2020, and 2021 Account Gross sales Year 2020 $ 422,500 Year 2021 $428,300 Less returns 4,600 8,900 Net sales 417,900 419,400 Cost of goods sold 95,020 100,400 Gross profit 322,880 319,000 Operating expenses Administration Advertising 63,760 84,350 36,114 38,400 Overhead 32,400 35,600 Operating income 190,606 160,650 Interest 8,000 10,500 Earnings before taxes 182,606 150,150 Taxes 27,391 22,523 Net income $ 155,215 $127,628 Small Business Finance - BUSG 1341- Homework-Chapter 4 Walnut Grove Company Balance Sheet Data As of December 31, 2020 and 2021 Category Current assets Year 2020 Year 2021 Cash Notes receivable 15,025 21,800 4,000 Accounts receivable 8,670 17,650 22,345 Inventory 30,200 42,000 Prepaid insurance 1,000 900 Prepaid legal 1,280 1,300 Total current assets 69,155 97,015 Fixed assets Land 30,000 30,000 Buildings 150,000 150,000 Accumulated depreciation (50,000) (53,000) Equipment 58,250 58,250 Accumulated depreciation (26,400) (32,500) Total fixed assets 161,850 152,750 Total assets 231,005 249,765 Current liabilities Accounts payable 34,250 32,000 Notes payable 18,600 15,300 Total current liabilities 52,850 47,300 Long-term debt Mortgage payable 64,000 62,000 Bank loan payable 22,000 35,000 Total long-term debt 86,000 97,000 Total liabilities 138,850 144,300 Owner's equity 92,155 105,465 Total liabilities and owner's equity 231,005 249,765