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 $1,106,000 $ 82,360 614,840 $ 697,200 61,140 636,060 $ 469,940 287,360 $ 182,580 12,800 $ 169,780 19,564 $ 150,216 Outdoor Waterworks Inc. Balance Sheet December 31, 2023 Assets Cash Current non-strategic investments Accounts receivable, net $ 23,600 26,160 53,480 Notes receivable Inventory Prepaid expenses Plant and equipment, net Total assets Liabilities and Equity 11,960 61,140 6,040 333,520 $515,900 Accounts payable $ 49,400 Accrued wages payable 6,520 Income taxes payable 7,380 Long-term note payable, secured by mortgage on plant 118,200 Common shares, 160,000 shares 199,000 Retained earnings 135,400 Total liabilities and equity $515,900 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 $439,720, common shares were $199,000, and retained earnings were $111,840. Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.) a Current ratio b. Quick ratio c Days' sales uncollected d. Inventory turnover e Days' sales in inventory 1 Ratio of pledged plant assets to secured liabilities g Times interest earned to 1 to 1 days times days to 11 times h Profit margin Total asset turnover Return on total assets k Return on common shareholders' equity % 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 Industry Average 161 1.11 21 days 5 times 70 days f. Ratio of pledged plant assets to secured liabilities 14:1 g Times interest earned h Profit margin Total asset turnover Return on total assets 50 times 14 % 23 times 20 % k Return on common shareholders' equity 32.7 % 4 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 $1,106,000 $ 82,360 614,840 $ 697,200 61,140 636,060 $ 469,940 287,360 $ 182,580 12,800 $ 169,780 19,564 $ 150,216 Outdoor Waterworks Inc. Balance Sheet December 31, 2023 Assets Cash Current non-strategic investments Accounts receivable, net $ 23,600 26,160 53,480 Notes receivable Inventory Prepaid expenses Plant and equipment, net Total assets Liabilities and Equity 11,960 61,140 6,040 333,520 $515,900 Accounts payable $ 49,400 Accrued wages payable 6,520 Income taxes payable 7,380 Long-term note payable, secured by mortgage on plant 118,200 Common shares, 160,000 shares 199,000 Retained earnings 135,400 Total liabilities and equity $515,900 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 $439,720, common shares were $199,000, and retained earnings were $111,840. Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.) a Current ratio b. Quick ratio c Days' sales uncollected d. Inventory turnover e Days' sales in inventory 1 Ratio of pledged plant assets to secured liabilities g Times interest earned to 1 to 1 days times days to 11 times h Profit margin Total asset turnover Return on total assets k Return on common shareholders' equity % 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 Industry Average 161 1.11 21 days 5 times 70 days f. Ratio of pledged plant assets to secured liabilities 14:1 g Times interest earned h Profit margin Total asset turnover Return on total assets 50 times 14 % 23 times 20 % k Return on common shareholders' equity 32.7 % 4