TB MC Qu. 20-69 (Algo) The inventory turnover ratio: The Sleep Company The Sleep Company had the following operating results for 2021-2022. In addition, the company paid dividends in both 2021 and 2022 of $67,200 per year and made capital expenditures in both years of $30,000 per year. The company's stock price in 2021 was $8 and $7 in 2022. The industry average earnings multiple for the mattress industry was 9 in 2022 and the free cash flow and sales multiples were 18 and 1.5, respectively. The company is publicly owned and has 1,600,000 shares of outstanding stock at the end of 2022. Balance Sheet, December 31, 2022 2021 $ 364,000 $ 124,000 $ 374,000 $ 424,000 $ 274,000 $ 324,000 Cash Accounts Receivable Inventory Total Current Assets Long-lived Assets Total Assets Current Liabilities Long-term Debt Shareholder Equity Total Debt and Equity $ 1,012,000 1,320,000 $ 2,332,000 $ 224,000 624,000 1,484,000 $ 2,332,000 Income Statement, for year ended December 31, Sales Cost of Sales 2022 $ 4,870,000 4,196,000 2021 $ 872,000 1,340,000 $ 2,212,000 $ 324,000 524,000 1,364,000 $ 2,212,000 $ 4,620,000 4,096,000 Gross Margin Operating Expenses Operating Income Taxes 674,000 524,000 362,000 412,000 312,000 112,000 124,800 44,800 Net Income $ 187,200 $ 67,200 Cash Flow From Operations Net Income 2022 2021 Plus Depreciation Expense + Decrease (-increase) in Accounts Receivable and Inventory + Increase (-decrease) in Current Liabilities Cash Flow from Operations $ 187,200 50,000 100,000 (-100,000) $ 237,200 $ 67,200 50,000 $ 117,200