WILDHORSE COMPANY Balance Sheets December 31 Assets 2022 2021 Cash $ 71,000 $ 67,000 Debt investments (short-term) 53,000 40,000 Accounts receivable 107,000 92,000 Inventory 239,000 168,000 Prepaid expenses 30,000 22,000 Land 130,000 130,000 Building and equipment (net) 263,000 185,000 Total assets $893,000 $704,000 Liabilities and Stockholders' Equity Notes payable $171,000 $104,000 Accounts payable 67,000 55,000 Accrued liabilities 41,000 41,000 Bonds payable, due 2025 251,000 172,000 Common stock, $10 par 200,000 200,000 Retained earnings 163,000 132,000 Total liabilities and stockholders' equity $893,000 $704,000WILDHORSE COMPANY Income Statements For the Years Ended December 31 2022 2021 Sales revenue $893,000 $793,000 Cost of goods sold 644,000 575,000 Gross profit 249,000 218,000 Operating expenses 190,000 161,000 Net income $ 59,000 $ 57,000 Additional information: 1. Inventory at the beginning of 2021 was $115,000. 2. Accounts receivable (net) at the beginning of 2021 were $89,000. 3. Total assets at the beginning of 2021 were $637,000. 4. No common stock transactions occurred during 2021 or 2022. 5 . All sales were on account.Compute the liquidity and protability ratios of Wildhorse Company for 2021 and 2022. (Round Current ratio. Asset turnover and Earnings per share to 2 decimal places, e3. 15.50 and round all other answers to 1 decimal place. as. 15.5. Round 96 change to 0 decimal places. for eg. 1% and #96 change is a decrease Show the numbers as negative, as. -1% or (1%,\" 2021 2022 %Change LIQUIDITY Current ratio 1.95 :1 1.29 :1 -8 96 Accounts receivables 8.8 times 59.0 times 2 96 turnover Inventory 4.1 times 3.2 times -22 % turnover 2021 2022 36 Change PROFITABILITY Prot margin 22 % % -8 Asset turnover 1.2 times 1.12 times -5 Return on assets 85 \"/6 9/6 -13 Earnings per share 5 2.85 $ 2.95 4 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%).) Situation Ratio 1. 20,000 shares of common stock were sold at par on July 1, 2023. Net income for 2023 was Return on common $55,000. stockholders' equity 2. All of the notes payable were paid in 2023. All other liabilities remained at their December Debt to assets ratio 31, 2022 levels. Total assets on December 31, 2023, were $890,000. 3. The market price of common stock was $9 and $12 on December 31, 2022 and 2023, Price-earnings ratio respectively. 2022 2023 % Change Return on common 29.5 18.3 -38 stockholders' equity Debt to 59 % 40 -32 % assets ratio Price earnings 3.1 times 8.7 times 181 ratio