Problem 12-4B Calculate risk ratios (L012-3)

Problem 12-4B Calculate risk ratios (LO12-3) The following income statement and balance sheets for The Athletic Attic are provided. THE ATHLETIC ATTIC Income Statement For the year ended December 31, 2021 Net sales $8,720,000 Cost of goods sold 5,360,000 Gross profit 3,360,000 Expenses: Operating expenses $1,510,000 Depreciation expense 192,000 Interest expense 32,000 Income tax expense 342,000 Total expenses 2,076,000 Net income $1,284,000 THE ATHLETIC ATTIC Balance Sheets December 31 2021 2020 $ Assets Current assets: Cash Accounts receivable Inventory Supplies Long-term assets: Equipment $ 146,000 700,000 1,315,000 92,000 196,000 720,000 985,000 67,000 1,060,000 1,060,000 2020 $ 196,000 720,000 985,000 67,000 THE ATHLETIC ATTIC Balance Sheets December 31 2021 Assets Current assets: Cash $ 146, 000 Accounts receivable 700,000 Inventory 1,315,000 Supplies 92,000 Long-term assets: Equipment 1,060,000 Less: Accumulated depreciation (384, 000) Total assets $2,929,000 Liabilities and stockholders' Equity Current liabilities: Accounts payable 97,000 Interest payable Income tax payable 31,000 Long-term liabilities: Notes payable 420,000 Stockholders' equity: Common stock 520,000 Retained earnings 1,861,000 Total liabilities and stockholders' equity $2,929,000 1,060,000 (192,000) $2,836,000 $ 73,000 3,200 29, 200 420,000 520,000 1,790,600 $2,836,000 Required: Assuming that all sales were on account, calculate the following risk ratios for 2021. (Use 365 d and final answers to 1 decimal place.) Required: Assuming that all sales were on account, calculate the following risk ratios for 2021 (Use 365 days a year. Round your intermediate and final answers to 1 decimal place.) times days times Risk Ratios 1. Receivables turnover ratio 2 Average collection period 3. Inventory tumover ratio 4 Average days in inventory 5. Current ratio 6. Acid-test ratio 7. Debt to equity ratio 8. Times interest earned ratio days to 1 to 1 times