The 2023 financial statements of Outdoor Waterworks Inc. follow: Outdoor Waterworks Inc. Income Statement For Year...

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The 2023 financial statements of Outdoor Waterworks Inc. follow: Outdoor Waterworks Inc. Income Statement For Year Ended December 31, 2023 Net sales Cost of goods sold: Inventory, Dec. 31, 2022 Purchases Goods available for sale Inventory, Dec. 31, 2023 Cost of goods sold Gross profit from sales Operating expenses Operating profit Interest expense Profit before taxes Income taxes Profit $1,046,000 $ $ $ 79,360 608,840 627,960 $ 418,040 281,360 136,680 12, 200 124,480 19,264 $ 105,216 $ 688,200 60,240 Assets Cash Outdoor Waterworks Inc. Balance Sheet December 31, 2023 Current non-strategic investments Accounts receivable, net Notes receivable Inventory Prepaid expenses Plant and equipment, net Total assets Liabilities and Equity Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant Common shares, 160,000 shares Retained earnings Total liabilities and equity $ 23,000 25,440 52,880 11,360 60,240 5,920 330,520 $509,360 $ 49,160 6,400 7,200 116,400 196,000 134,200 $509,360 K Assume all sales were on credit. Also assume the long-term note payable is due in 2026, with no current portion. On the December 31, 2022, balance sheet, the assets totalled $436,720, common shares were $196,000, and retained earnings were $110,040. Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.) 4 a. Current ratio b. Quick ratio c. Days' sales uncollected d. Inventory turnover e Days' sales in inventory f. Ratio of pledged plant assets to secured liabilities g. Times interest earned h. Profit margin i. Total asset turnover jReturn on total assets k. Return on common shareholders' equity to 1 to 1 days times days to 1 times % times % % Analysis Component: Identify whether the ratios calculated above are favourable or unfavourable to the industry averages. a. Current ratio b. Quick ratio c. Days' sales uncollected d. Inventory turnover e. Days' sales in inventory f. Ratio of pledged plant assets to secured liabilities g. Times interest earned h. Profit margin i. Total asset turnover j. Return on total assets k. Return on common shareholders' equity Industry Average 1.6:1 1.1:1 21 days 5 times 70 days 1.4.1 50 times 14 % 2.3 times 20 % 32.7 % A The 2023 financial statements of Outdoor Waterworks Inc. follow: Outdoor Waterworks Inc. Income Statement For Year Ended December 31, 2023 Net sales Cost of goods sold: Inventory, Dec. 31, 2022 Purchases Goods available for sale Inventory, Dec. 31, 2023 Cost of goods sold Gross profit from sales Operating expenses Operating profit Interest expense Profit before taxes Income taxes Profit $1,046,000 $ $ $ 79,360 608,840 627,960 $ 418,040 281,360 136,680 12, 200 124,480 19,264 $ 105,216 $ 688,200 60,240 Assets Cash Outdoor Waterworks Inc. Balance Sheet December 31, 2023 Current non-strategic investments Accounts receivable, net Notes receivable Inventory Prepaid expenses Plant and equipment, net Total assets Liabilities and Equity Accounts payable Accrued wages payable Income taxes payable Long-term note payable, secured by mortgage on plant Common shares, 160,000 shares Retained earnings Total liabilities and equity $ 23,000 25,440 52,880 11,360 60,240 5,920 330,520 $509,360 $ 49,160 6,400 7,200 116,400 196,000 134,200 $509,360 K Assume all sales were on credit. Also assume the long-term note payable is due in 2026, with no current portion. On the December 31, 2022, balance sheet, the assets totalled $436,720, common shares were $196,000, and retained earnings were $110,040. Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.) 4 a. Current ratio b. Quick ratio c. Days' sales uncollected d. Inventory turnover e Days' sales in inventory f. Ratio of pledged plant assets to secured liabilities g. Times interest earned h. Profit margin i. Total asset turnover jReturn on total assets k. Return on common shareholders' equity to 1 to 1 days times days to 1 times % times % % Analysis Component: Identify whether the ratios calculated above are favourable or unfavourable to the industry averages. a. Current ratio b. Quick ratio c. Days' sales uncollected d. Inventory turnover e. Days' sales in inventory f. Ratio of pledged plant assets to secured liabilities g. Times interest earned h. Profit margin i. Total asset turnover j. Return on total assets k. Return on common shareholders' equity Industry Average 1.6:1 1.1:1 21 days 5 times 70 days 1.4.1 50 times 14 % 2.3 times 20 % 32.7 % A

Answer rating: 100% (QA)

SOLUTION a Current ratio Current assets Current liabilities Current assets Cash Accounts receivable Notes receivable Inventory Prepaid expenses 23000 25440 52880 60240 5920 167480 Current liabilities ... View the full answer