Question

Income statement and balance sheet data for The Athletic Attic are provided below.

THE ATHLETIC ATTIC Income Statements For the years ended December 31
	2019	2018
Net sales	$11,520,000	$10,000,000
Cost of goods sold	7,520,000	6,200,000
Gross profit	4,000,000	3,800,000
Expenses:
Operating expenses	1,680,000	1,630,000
Depreciation expense	200,000	200,000
Interest expense	48,000	48,000
Income tax expense	496,000	430,000
Total expenses	2,424,000	2,308,000
Net income	$1,576,000	$1,492,000

THE ATHLETIC ATTIC Balance Sheets December 31
	2019	2018	2017
Assets
Current assets:
Cash	$   233,000	$   162,000	$   220,000
Accounts receivable	998,000	748,000	768,000
Inventory	1,733,000	1,363,000	1,033,000
Supplies	138,000	108,000	83,000
Long-term assets:
Equipment	1,420,000	1,420,000	1,420,000
Less: Accumulated depreciation	(680,000)	(480,000)	(280,000)
Total assets	$3,842,000	$3,321,000	$3,244,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$   198,200	$   129,000	$     112,200
Interest payable	4,800	0	4,800
Income tax payable	48,000	43,000	38,000
Long-term liabilities:
Notes payable	580,000	580,000	580,000
Stockholders' equity:
Common stock	680,000	680,000	680,000
Retained earnings	2,331,000	1,889,000	1,829,000
Total liabilities and stockholders’ equity	$3,842,000	$3,321,000	$3,244,000
2018 2019 Receivables turnover ratio times times Inventory turnover ratio times times Current ratio to 1 to 1 Debt to equity ratio % % 2018 2019 Gross profit ratio % % Return on assets % % Profit margin % % Asset turnover times times

Answer 1

Answer:

	2019	2018
Receivables turnover ratio	13.1959 times	13.1926 times
Inventory turnover ratio	4.858 times	5.175 times
Current ratio	12.359	13.843
Debt to equity ratio	27.60%	29.27%

	2019	2018
Gross profit ratio	34.72%	38.00%
Return on assets	44.00%	45.45%
Profit margin	13.68%	14.92%
Asset turnover	3.217 times	3.046 times

Working notes for the above answer is as under