+ Working with any one on this project will represent academic dishonesty and result in a grade of zero for this project Opossumtown, Inc. is a farm equipment retailer with a history of inconsistent financial performance. You have gathered the following industry average financial data: Balance Sheet Ratios Data Title Quick ratio Current ratio Debt Ratio Average collection period 1.3 to 1 Gross Profit Margin Income Statement Ratios Industry Average Data Title Industry Average 42.8% Operating Margin 23.6% 10.2% 155 days 2.2 to 1 42.5% 40 days Profit Margin Days to sell inventory Additionally, you have learned that the company sells its merchandise on net 45 days credit. Below are comparative financial statements for the last two years. Opossumtown, Inc. Income Statement For the Years Ended July 31, 20X2 and July 31, 20X1 Sales Cost of goods sold Gross profit Operating expenses: Selling expenses Commissions 20X2 $900,000 530,000 $370,000 20X1 $750,000 420,000 330,000 60,000 40,000 Advertising 52,000 22,000 Travel 20,000 13,000 Total selling expenses 132,000 75,000 General and administrative expenses Salaries 70,000 60,000 Rent 22,000 20,000 Utilities 12,000 10,000 Supplies 7,000 5,000 Total general and admin. expenses 111,000 95,000 Total operating expenses 243,000 170,000 Operating income 127,000 160,000 Non-operating Items: increase/(decrease) Add: Interest/dividend revenue 20,800 Deduct: Interest expense 32,000 16,000 36,000 Total net non-operating items (11,200) Income before income taxes 115,800 (20,000) 140,000 Income tax expense 40,800 50,000 Net income $ 75,000 $ 90,000