Using Ratios to Analyze Risk and Return Required: 1. Calculate the following risk ratios for 2021 and
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Question:
Using Ratios to Analyze Risk and Return
Required:
1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.)
2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.)
[The following information applies to the questions below.]
The following is the income statement and balance sheet data for The Athletic Attic.
| THE ATHLETIC PENTHOUSE | ||||||
| Income Statements | ||||||
| For the years ended December 31 | ||||||
| 2022 | 2021 | |||||
| net sales | ps | 12,780,000 | ps | 11,350,000 | ||
| cost of goods sold | 8,330,000 | 7,100,000 | ||||
| Gross profit | 4.450.000 | 4,250,000 | ||||
| Bills: | ||||||
| operating expenses | 1,770,000 | 1,720,000 | ||||
| depreciation expense | 200,000 | 200,000 | ||||
| Interest expenses | 57,000 | 57,000 | ||||
| Income from tax expenses | 604,000 | 520.000 | ||||
| Total expenses | 2.631.000 | 2.497.000 | ||||
| Net Income | ps | 1,819,000 | ps | 1,753,000 | ||
| THE ATHLETIC PENTHOUSE | ||||||||||||
| Balances | ||||||||||||
| December 31 | ||||||||||||
| 2022 | 2021 | 2020 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Money | ps | 242,000 | ps | 172,000 | ps | 238,000 | ||||||
| accounts receivable | 1,007,000 | 757,000 | 777,000 | |||||||||
| Inventory | 1,742,000 | 1,372,000 | 1,042,000 | |||||||||
| supplies | 147.000 | 117,000 | 92,000 | |||||||||
| Long-term assets: | ||||||||||||
| Equipment | 1,780,000 | 1,780,000 | 1,780,000 | |||||||||
| Less: Accumulated depreciation | (770.000 | ) | (570.000 | ) | (370.000 | ) | ||||||
| total assets | ps | 4.148.000 | ps | 3.628.000 | ps | 3.559.000 | ||||||
| Liabilities and Equity | ||||||||||||
| current liabilities: | ||||||||||||
| Accounts payable | ps | 224,300 | ps | 157,000 | ps | 147,300 | ||||||
| interest to pay | 5,700 | 0 | 5,700 | |||||||||
| Income tax payable | 57,000 | 52,000 | 47,000 | |||||||||
| Long term passives: | ||||||||||||
| Pay | 670.000 | 670.000 | 670.000 | |||||||||
| Equity: | ||||||||||||
| Common actions | 770.000 | 770.000 | 770.000 | |||||||||
| Retained earnings | 2.421.000 | 1,979,000 | 1,919,000 | |||||||||
| Total liabilities and stockholders' equity | ps | 4.148.000 | ps | 3.628.000 | ps | 3.559.000 | ||||||
Problem 12-6B Part 1
Required:
1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.)
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2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.)
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Expert Answer:
The question is asking for the calculation of several ratios from 2021 to 2022 both risk and profita... View the full answer
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