The comparative balance sheets of Waterways Corporations Irrigation Installation Division for the years 2019 and 2020 and the income statements for the year 2019 and 2020 are presented below. Additional information: 85% of the sales for Waterways were credit sales. There are 5,000 shares outstanding for both years. This is a private corporation whose shares are not available to the public.

$740,300 547,100 $833,700 685,300 705,800 16,600 76,000 2,317,400 7,400 42,500 1,337,300 Cash Accounts receivable Work in process Inventory Prepaid expenses Total current assets Property, plant, and equipment Land Buildings Equipment Furnishings Accumulated depreciation Total property, plant, and equipment 297,000 454,000 930,000 40,300 (482,200) 1,239,100 $3,556,500 297,000 454,000 800,000 40,300 (484,300) 1,107,000 $2,444,300 $127,200 79,400 1,900 Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable Income taxes payable Wages payable Interest payable Other current liabilities Revolving bank loan payable Total current liabilities Long-term liabilities Note payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $158,700 101,300 4,400 1,200 14,500 15,000 295,100 15,400 223,900 138,000 433,100 223,900 1,250,000 1,873,400 3,123,400 $3,556,500 1,250,000 970,400 2,220,400 $2,444,300 WATERWAYS CORPORATION-INSTALLATION DIVISION Income Statements For the Year Ending December 31 2020 2019 Sales $5,571,500 $4,961,200 Less: Cost of goods sold 3,159,600 2,824,500 Gross profit 2,411,900 2,136,700 Operating expenses Advertising 49,600 47,600 Insurance 403,400 403,400 Salaries and wages 580,900 550,900 Depreciation 72,400 63,400 Other operating expenses 21,300 18,588 Total operating expenses 1,127,600 1,083,888 Income from operations 1,284,300 1,052,812 Other income Gain on sale of equipment 17,900 Other expenses Interest expense (12,200) Income before income tax 1,290,000 1,052,812 Income tax expense 387,000 315,844 Net income $903,000 $736,968 (a) WAYS Income Statement 2020 2019 Change Percent X Sales $5,571,500 $4,961,200 5,571,500 100 || % X Less: Cost of goods sold 3,159,600 2,824,500 3,159,600 56.71 || % x Gross profit 2,411,900 2,136,700 2,411,900 43.29 || % Operating expenses X Advertising 49,600 47,600 49,600 0.89 || % x Insurance 403,400 403,400 403,400 7.24 || % X Salaries and wages 580,900 550,900 580,900 10.43 || % X Depreciation 72,400 63,400 72,400 1.30 % X Other operating expenses 21,300 18,588 21,300 0.38 || % X Total operating expenses 1,127,600 1,083,888 1,127,600 20.24 || % Income from operations 1,284,300 1,052,812 % Other income Gain on sale of equipment 17,900 17,900 0.32 || % x Gain on sale of equipment 17,900 17,900 0.32 || % Other expenses Interest expense (12,200) 12,200 0.22 || % x Income before income tax 1,290,000 1,052,812 1,290,000 23.15 || % X Income tax expense 387,000 315,844 387,000 6.95 || % X x Net income $903,000 $736,968 903,000 16.21 % () Income Statement X Amount Percent X Sales $5,571,500 12.30 || % X Less: Cost of goods sold 3,159,600 11.86 || % x Gross profit 2,411,900 12.88 % Operating expenses Advertising 49,600 4.20 % Insurance 403,400 0 % x Salaries and wages 580,900 5.45 || % Depreciation 72,400 14.25 || % X Other operating expenses 21,300 14.59 % X Total operating expenses 1,127,600 4.03 || % x Income from operations 1,284,300 21.99 % Other income X Gain on sale of equipment 17,900 0 % Other expenses X Interest expense (12,200) oll % Income before income tax 1,290,000 22.53% X Income tax expense 387,000 22.53 || % Net income $903,000 18.39 || % (c) (c) Calculate the following ratios for 2020 and indicate whether the ratio is a liquidity, solvency, or profitabil ratio and Earnings per share to 2 decimal places, e.g. 15.25. Round Average collection period, stockholders' equity ratio and Times interest earned ratio to 1 decimal place, e.g. 15.2 or 15.2 Type (1) Asset turnover ratio 1.86 times Solvency (2) Accounts receivable turnover ratio 7.69 times Solvency (3) Average collection period 47.46 days Solvency (4) Current ratio 7.85:1 Solvency (5) Debt to assets ratio 12.18% Solvency * (6) Earnings per share 180.60 Liquidity $ (7) Profit margin 16.21 % X Solvency (8) Return on assets ratio 30.15% Profitability v (9) Return on common stockholders' equity ratio 33.86% Profitability v (10) Times interest earned ratio 106.74 times Solvency