The 2020 financial statements of Outdoor Waterworks Inc. fol Outdoor Waterworks Inc. Income Statement For Year...

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The 2020 financial statements of Outdoor Waterworks Inc. fol 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 $1,166,000 $ 85,360 620,840 $ 706,200 62,040 644,160 $ 521,840 293,360 $ 228,480 13,400 $ 215,080 19,864 $ 195,216 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 Liabilities and Equity Accounts payable Accrued wages payable $ 24,200 26,880 54,080 12,560 62,040 6,160 336,520 $522,440 $ 49,640 6,640 Accrued wages payable 6,640 Income taxes payable 7,560 Long-term note payable, secured by mortgage on plant 120,000 Common shares, 160,000 shares 202,000 Retained earnings Total liabilities and equity 136,600 $522,440 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 $442,720, common shares were $202,000, and retained earnings were $113,640. Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.) a Current ratio b. Quick ratio c. Days' sales uncollected d. Inventory turnover e. Days' sales in inventory f. Ratio of pledged plant assets to secured liabilities g. Times interest earned to 1 to 1 days times days to 1 times h. Profit margin i. Total asset turnover % times j. Return on total assets % k. Return on common shareholders' equity % Analysis Component: Identify whether the ratios calculated above are favourable or unfavourable to the industry averages. a. Current ratio b. Quick ratio c. Days' sales uncollected d. Inventory turnover e. Days' sales in inventory Industry Average 1.6:1 1.1:1 21 days 5 times 70 days f. Ratio of pledged plant assets to secured liabilities 1.4:1 g. Times interest earned h. Profit margin i. Total asset turnover J. Return on total assets 50 times 14 % 2.3 times 20 % k. Return on common shareholders' equity 32.7 % The 2020 financial statements of Outdoor Waterworks Inc. fol 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 $1,166,000 $ 85,360 620,840 $ 706,200 62,040 644,160 $ 521,840 293,360 $ 228,480 13,400 $ 215,080 19,864 $ 195,216 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 Liabilities and Equity Accounts payable Accrued wages payable $ 24,200 26,880 54,080 12,560 62,040 6,160 336,520 $522,440 $ 49,640 6,640 Accrued wages payable 6,640 Income taxes payable 7,560 Long-term note payable, secured by mortgage on plant 120,000 Common shares, 160,000 shares 202,000 Retained earnings Total liabilities and equity 136,600 $522,440 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 $442,720, common shares were $202,000, and retained earnings were $113,640. Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.) a Current ratio b. Quick ratio c. Days' sales uncollected d. Inventory turnover e. Days' sales in inventory f. Ratio of pledged plant assets to secured liabilities g. Times interest earned to 1 to 1 days times days to 1 times h. Profit margin i. Total asset turnover % times j. Return on total assets % k. Return on common shareholders' equity % Analysis Component: Identify whether the ratios calculated above are favourable or unfavourable to the industry averages. a. Current ratio b. Quick ratio c. Days' sales uncollected d. Inventory turnover e. Days' sales in inventory Industry Average 1.6:1 1.1:1 21 days 5 times 70 days f. Ratio of pledged plant assets to secured liabilities 1.4:1 g. Times interest earned h. Profit margin i. Total asset turnover J. Return on total assets 50 times 14 % 2.3 times 20 % k. Return on common shareholders' equity 32.7 %