The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2023 for the years 2023 and 2022, and the income statements for the years ended October 31, 2022 and 2023, are presented below. COOKIE & COFFEE CREATIONS INC. Balance Sheet October 31 Assets 2023 2022 Cash $29,074 $11,550 Accounts receivable 3,250 2,710 Inventory 7,897 7,450 Prepaid expenses 5,800 6,050 Equipment 102,000 75,500 Accumulated depreciation (25,200) (9,100) Total assets $122,821 $94,160 Liabilities and Stockholders' Equity Accounts payable $1,150 $2,450 Income taxes payable 9,251 7,200 Dividends payable 27,000 27,000 Salaries and wages payable 7,250 1,280 Interest payable 188 0 Note payable-current portion 4,000 0 Note payable-long-term portion 6,000 0 Preferred stock, no par, $6 cumulative-3,000 and 2,800 shares issued, respectively 15,000 14,000 Common stock, $1 par-25,930 shares issued 25,930 25,930 Additional paid in capital-treasury stock 250 0 26,802 16,800 Retained earnings Less treasury stock Total liabilities and stockholders' equity 0 (500) $122,821 $94,160 COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31 2023 2022 Sales $485,625 $462,500 Cost of goods sold 222,694 208,125 Gross profit 262,931 254,375 Operating expenses Salaries and wages expense 147,979 146,350 Depreciation expense 17,600 9,100 Other operating expenses 48.186 42,925 Total operating expenses 213,765 198,375 Income from operations 49,166 56,000 Other expenses Interest expense 413 0 Loss on disposal of plant assets 2,500 0 Total other expenses 2,913 0 Income before income tax 46,253 56,000 Income tax expense 9,251 14,000 Net income $37,002 $42,000 Additional information: Natalie and Curtis are thinking about borrowing an additional $20,000 to buy more kitchen equipment. The loan would be repaid over a 4-year period. The terms of the loan provide for equal semi-annual payments of $2,500 on May 1 and November 1 of each year, plus interest of 5% on the outstanding balance. Calculate the following ratios for 2022 and 2023. (Round current ratio to 2 decimal places, eg. 12.61, debt to assets and gross profit rate to O decimal places, eg. 12 and all other answers to 1 decimal place, eg. 12.6%.) 2023 2022 Current ratio :1 Debt to assets % Gross profit rate % Profit margin % Return on assets (Total assets at November 1, 2021, were $35,180.) % Return on common stockholders' equity (Total common stockholders' equity at November 1, 2021, was $25,180. Dividends on preferred stock were $16,800 in 2022 and $18,000 in 2023). % What impact would borrowing an additional $20,000 to buy more equipment have on each of the ratios in (a) above, assuming that no changes are expected on the income statement and balance sheet? 1. Current ratio 2. Debt to assets 3. Gross profit rate 4. Profit margin 5. Return on assets 6. Return on common stockholders' equity