The 2023 financial statements of Outdoor Waterworks Inc. follow: Outdoor Waterworks Inc. Income Statement For Year Ended December 31, 2023 Net sales Cost of goods sold: Inventory, Dec. 31, 2022 Purchases Goods available for sale. Inventory, Dec. 31, 2023 Cost of goods sold Gross profit from sales Operating expenses Operating profit Interest expense Profit before taxes. Income taxes $1,126,000 $ 83,360 616,840 $ 700,200 61,440 638,760 $ 487,240 289,360 $ 197,880 13,000 $ 184,880 19,664 Profit Assets Cash Outdoor Waterworks Inc. Balance Sheet December 31, 2023 Current non-strategic investments Accounts receivable, net Notes receivable. Inventory Prepaid expenses Plant and equipment, net Total assets Liabilities and Equity An unbl $ 165,216 $ 23,800 26,400 53,680 12,160 61,440 6,080 334,520 $518,080 440 400 Assets Cash Outdoor Waterworks Inc. Balance Sheet December 31, 2023 Current non-strategic investments Accounts receivable, net Notes receivable Inventory Prepaid expenses Plant and equipment, net Total assets Liabilities and Equity Accounts payable $ 23,800 26,400 53,680 12,160 61,440 6,080 334,520 $518,080 $ 49,480 Accrued wages payable 6,560 Income taxes payable: 7,440 Long-term note payable, secured by mortgage on plant 118,800 Common shares, 160,000 shares 200,000 Retained earnings 135,800 Total liabilities and equity $518,080 Assume all sales were on credit. Also assume the long-term note payable is due in 2026, with no current portion. On the December 31, 2022, balance sheet, the assets totalled $440,720, common shares were $200,000, and retained earnings were $112,440. Assume all sales were on credit. Also assume the long-term note payable is due in 2026, with no current portion. On the December 31, 2022, balance sheet, the assets totalled $440,720, common shares were $200,000, and retained earnings were $112.440. 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 2.89 to 1 1.92 to 1 58 62 days 8.82 times 41.38 days 1 Ratio of pledged plant assets to secured liabilities 2.82 to 1 4 g Times interest earned h. Profit margin 1 Total asset turnover Return on total assets k. Return on common shareholders' equity 31 89% 49 20 % 15.22 times 14 67 % 2.17 times Analysis Component: Identify whether the ratios calculated above are favourable or unfavourable to the industry averages. a. Current ratio b. Quick ratio Industry Average 1.6:1 c. Days' sales uncollected d. Inventory turnover e Days' sales in inventory f Ratio of pledged plant assets to secured liabilities 1.4:1 g. Times interest earned h. Profit margin i. Total asset turnover 1.1.1 21 days 5 times 70 days 50 times: 14 % 2.3 times Return on total assets 20 % k Return on common shareholders' equity 32.7 % L3