Williams Company is a manufacturer of auto parts having the following financial statements for 2021–2022.

Required

Calculate and interpret the financial ratios for Williams for both years. Because the calculation of many ratios requires the average balance in an account (e.g., average receivables is required in calculating receivables turnover), you may assume for simplicity that the balances in these accounts in 2021 are the same as those in 2020.

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Balance Sheet December 31, 2022 2021 Cash Accounts receivable Inventory $ 135,000 225,000 175,000 $ 535,000 1,500,000 $ 2,035,000 $ 175,000 800,000 1,060,000 $ 2,035,000 $ 260,000 150,000 385,000 Total current assets $ 795,000 Long-lived assets Total assets Current liabilities Long-term debt Shareholders' equity Total debt and equity 1,640,000 $2,435,000 $ 200,000 900,000 1,335,000 $2,435,000 Income Statement For the Years Ended December 31 2022 2021 $3,600,000 2,600,000 1,000,000 450,000 550,000 192,500 $357,500 Sales Cost of sales Gross margin $3,500,000 2,500,000 1,000,000 Operating expenses* Operating income Тахes Net income 500,000 500,000 175,000 $ 325,000