The following financial information is for Ivanhoe Company. IVANHOE COMPANY Balance Sheets December 31 Assets Cash 2022 2021 $ 70,000 $ 68,000 Debt investments (short-term) Accounts receivable 51,000 40,000 104,000 89,000 Inventory 230,000 168,000 Prepaid expenses 22,000 28,000 Land 131,000 131,000 Building and equipment (net) 262,000 185,000 Total assets $870,000 $709,000 Liabilities and Stockholders' Equity Notes payable $171,000 $102,000 Accounts payable 67,000 52,000 Accrued liabilities 39,000 39,000 Bonds payable, due 2025 249,000 170,000 Common stock, $10 par 199,000 199,000 Retained earnings 145,000 147,000 Total liabilities and stockholders' equity $870,000 $709,000 IVANHOE COMPANY Income Statements For the Years Ended December 31 2022 2021 Sales revenue $905,000 $797,000 Cost of goods sold 648,000 574,000 Gross profit 257,000 223,000 Operating expenses 191,000 159,000 Net income $66,000 $ 64,000 1. Inventory at the beginning of 2021 was $116,000. 2. Accounts receivable (net) at the beginning of 2021 were $88,000. 3. Total assets at the beginning of 2021 were $634,000. 4. No common stock transactions occurred during 2021 or 2022. 5. All sales were on account. (a1) Compute the liquidity and profitability ratios of Ivanhoe Company for 2021 and 2022. (Round Curent ratio, Asset turnover and Earnings per share to 2 decimal places, e.g. 15.50 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to O decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) 2021 2022 % Change LIQUIDITY Current 1.54 :1 2.04 :1 -16 % ratio Accounts receivables 9.4 times 9.0 times 4 % turnover Inventory 3.3 times 4.0 times -19 % turnover PROFITABILITY Profit margin Asset turnover 2021 7.3 % 2022 8 % 1.15 times 1.19 times % Change -9 Return on assets 8.4 % 9.5 % -12 Profit margin 7.3 % 8 % Asset turnover Return on assets 1.15 times 1.19 times 8.4 % 9.5 % -12 Earnings per share $ 3.32 3.22 (b) Given below are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2022, and (2) as of December 31, 2023, after giving effect to the situation. (Round Debt to assets ratio to O decimal places, e.g. 15 and round all other answers to 1 decimal place, e.g. 15.5. Round % change to O decimal places, for e.g. 1% and if % change is a decrease show the numbers as negative, e.g. -1% or (1%).) 1. Situation 18,000 shares of common stock were sold at par on July 1, 2023. Net income for 2023 was $50,000. 2. All of the notes payable were paid in 2023. All other liabilities remained at their December 31, 2022 levels. Total assets on December 31, 2023, were $877,000. 3. The market price of common stock was $9 and $12 on December 31, 2022 and 2023, respectively. Return on common stockholders' 2022 10.9 % 2023 19.1 % Ratio Return on common stockholders' equity Debt to assets ratio Price-earnings ratio % Change -43 % equity Debt to 40 % 60 % -33 % assets ratio Price earnings 6.9 times 2.7 times 156 % ratio