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the Internet can contain vises Inless you need to edit it's safe to stay in Protected View Enable Editing Question 2 The following information has been gathered to assist you in deciding whether to make a short-term loan to Socks & Gizmo Limited. 1 Socks & Gizmo Limited Income Statement Year Ended October 31, 2021 2021 s Sales Cost of goods sold 800,000 300,000 500,000 Selling & Admin Depreciation expense Advertising Office expenses Utilities expense Salary expense Insurance expense 12,000 22,000 32,000 24,000 290,000 5,000 Interest expense Income before income taxes Income tax expense Net income 385,000 115,000 18,000 97,000 12,000 85,000 $ Socks & Gizmo Limited Balance Sheet October 31, 2021 S ASSETS Current Assets Cash Accountsreceivable Alowance for doubtful accounts Inventory Prepaid expenses 87000 9,800 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities 32,600 Accounts payable 5 176,800 Salary payable 6,000 77,200 Income taxes payable 12,000 120,000 194 800 1,250 231,050 Note payable 375,000 Total Liabilities 569,800 500,000 Shareholders' Equity 731,050 Common shares 25,000 Retained earnings 136,250 Total shareholders equity 161 250 Property, plant & equipment Accumulated depreciation - PPE 600,000 100,000 S a A TOTAL LIABILITIES & SHAREHOLDERS EQUITY $ 731,050 Additional information: Dividends declared & paid in 2021 Numhor of charac outctanding at October 21 2021 $40,000 12.500 Additional information: Dividends declared & paid in 2021 Number of shares outstanding at October 31, 2021 Market price per share at October 31, 2021 $40,000 12,500 S 30.00 Selected Data from the October 31, 2020 financial statements: Accounts receivable, net 61,500 Inventory 85,000 Total assets 648,900 Accounts payable 151,200 Total shareholder's equity 116,250 Industry averages -2021 Socks & Gizmo Limited 2020 60.00% 62.00% 9% 10.00% 16% 17% Gross profit margin ratib Return on sales (net profit margin) Return on total assets Debt ratio Current ratio Asset tumover Quick Ratio Earnings per share Dividend Yield 0.6 1.5 2.1 1 6 0.1 0.61 1.4 1.4 0.8 63 0.09 Required: 1. Calculate 12 ratios for the year ended October 31, 2021 for Socks & Gizmo Limited using the ratio sheet provided in Moodle. You may calculate any 12 you wish. 2. Discuss 4 ratios calculated in part 1. 3. Based on the ratios you discussed in Part 2 would you be willing to give Socks & Gizmo Limited a short-term loan? Why or why not

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