Required information

Problem 12-6B Use ratios to analyze risk and profitability (LO12-3, 12-4)

[The following information applies to the questions displayed below.] Income statement and balance sheet data for The Athletic Attic are provided below.

THE ATHLETIC ATTIC
Income Statements
For the years ended December 31
		2022			2021
Net sales	$	12,080,000		$	10,600,000
Cost of goods sold		7,880,000			6,600,000
Gross profit		4,200,000			4,000,000
Expenses:
Operating expenses		1,720,000			1,670,000
Depreciation expense		200,000			200,000
Interest expense		52,000			52,000
Income tax expense		544,000			470,000
Total expenses		2,516,000			2,392,000
Net income	$	1,684,000		$	1,608,000

THE ATHLETIC ATTIC
Balance Sheets
December 31
		2022				2021				2020
Assets
Current assets:
Cash	$	237,000			$	167,000			$	228,000
Accounts receivable		1,002,000				752,000				772,000
Inventory		1,737,000				1,367,000				1,037,000
Supplies		142,000				112,000				87,000
Long-term assets:
Equipment		1,580,000				1,580,000				1,580,000
Less: Accumulated depreciation		(720,000	)			(520,000	)			(320,000	)
Total assets	$	3,978,000			$	3,458,000			$	3,384,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	209,800			$	142,000			$	127,800
Interest payable		5,200				0				5,200
Income tax payable		52,000				47,000				42,000
Long-term liabilities:
Notes payable		620,000				620,000				620,000
Stockholders' equity:
Common stock		720,000				720,000				720,000
Retained earnings		2,371,000				1,929,000				1,869,000
Total liabilities and stockholders equity	$	3,978,000			$	3,458,000			$	3,384,000

Required: 1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.)

	2021		2022
Receivables turnover ratio		times		times
Inventory turnover ratio		times		times
Current ratio		to 1		to 1
Debt to equity ratio		%		%