The 2020 financial statements of Outdoor Waterworks Inc. follow: 12 Outdoor Waterworks Inc. Income Statement For Year Ended December 31, 2020 Net sales $1,146,000 Cost of goods sold: Inventory, Dec. 31, 2019 $ 84,360 Purchases 618,840 Goods available for sale $ 703,2001 Inventory, Dec. 31, 2020 61,740 Cost of goods sold 641,460 Gross profit from sales $ 504,540 Operating expenses 291, 360 Operating profit $ 213, 180 Interest expense 13,200 Profit before taxes $ 199,980 Income taxes 19,764 Profit $ 180, 216 Outdoor Waterworks Inc. Balance Sheet December 31, 2020 Outdoor baterworks Inc. Balance Sheet December 31, 2020 Assets Cash $ 24,90 Current non-strategic investments 26,640 Accounts receivable, net 53,83 Notes receivable 12,36 Inventory 61,740 Prepaid expenses 6,120 Plant and equipment, net 335,520 Total assets $50,260 Liabilities and Equity Accounts payable $ 49,560 Accrued woges payable 6,600 Incone taxes payable 7,500 Long-term note payable, secured by mortgage on plant 119,480 Common shares, 160, ese shares 201, Retained earnings 136,200 Total liabilities and equity $520,260 Assume all sales were on Credit. Also assume the long term nole payable is due in 2023, with no current portion. On the December 31 2019, balance sheet, the assets totalled $441,720, common shares were $201.000, and retained earnings were $113,040 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 to 1 b. QUER Tato to 1 days c. Days Sales uncollected martinis Itine Prex 12 of 16 3 Next > Assume all sales were on credit. Also assume the long-term nole payable is due in 2023, with no current portion. On the December 31, 2019, balance sheet, the assets totalled $441.720, common shares were $201000, and retained earnings were $113,040 Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.) to 1 to 1 days omes a Current rabo b. Quick ratio c Days' sales uncollected d inventory turnover e Days' sales in inventory 1 Ratio of pledged plant assets to secured liabilities a Times interest earned h Profit margin 1 Total asset turnover 1 Roturn on total assets K Return on common shareholders' equity days to 1 times % times 96 % Anabeele CAMRANAR 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 f. Ratio of pledged plant assets to secured liabilities g Times interest earned h. Profit margin i. Total asset turnover j. Return on total assets k Return on common shareholders' equity Industry Average 1.6.1 Favourable 1.1.1 Favourable 21 days Favourable 5 times Favourable 70 days Favourable 1.4:1 Favourable 50 times Unfavourable 14% Unfavourable 2.3 times Unfavourable 20 % Unfavourable 32.7 % Unfavourable 12 of 16 Next >
