The 2020 financial statements of Outdoor Waterworks Inc. follow:

Outdoor Waterworks Inc.

Income Statement

For Year Ended December 31, 2020

Net sales $ 1,076,000

Cost of goods sold:

Inventory, Dec. 31, 2019 $ 80,860

Purchases 611,840

Goods available for sale $ 692,700

Inventory, Dec. 31, 2020 60,690

Cost of goods sold 632,010

Gross profit from sales $ 443,990

Operating expenses 284,360

Operating profit $ 159,630

Interest expense 12,500

Profit before taxes $ 147,130

Income taxes 19,414

Profit $ 127,716

Outdoor Waterworks Inc.

Balance Sheet

December 31, 2020

Assets

Cash $ 23,300

Current non-strategic investments 25,800

Accounts receivable, net 53,180

Notes receivable 11,660

Inventory 60,690

Prepaid expenses 5,980

Plant and equipment, net 332,020

Total assets $ 512,630

Liabilities and Equity

Accounts payable $ 49,280

Accrued wages payable 6,460

Income taxes payable 7,290

Long-term note payable, secured by mortgage on plant 117,300

Common shares, 160,000 shares 197,500

Retained earnings 134,800

Total liabilities and equity $ 512,630

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 $438,220, common shares were $197,500, and retained earnings were $110,940.

Required:

Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.)

Analysis Component:

Identify whether the ratios calculated above are favourable or unfavourable to the industry averages.

a. Current ratio to 1 b. Quick ratio to 1 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 1. Total asset turnover 1. Return on total assets k. Return on common shareholders' equity days times days to 1 times % times % % Prev 1 of 1 Next 0 BRL re to search D a Current ratio b. Quick ratio C. Days' sales uncollected d. Inventory turnover e Days' sales in inventory 1. Ratio of pledged plant assets to secured liabilities g. Times interest earned h. Profit margin 1 Total asset turnover j Return on total assets k Return on common shareholders' equity Industry Average 1.6.1 1.1.1 21 days 5 times 70 days 1.4.1 50 times 14 % 2.3 times 20% 327 % Prev 1 of 1 Nex! O here to search