Cullumber Company Balance Sheets December 31 Assets 2020 2019 Cullumber Company $ 64,000 $ 70,000 Cash Income Statements 53,000 Debt investments (short-term) 39,000 For the Years Ended December 31 Accounts receivable 108,000 90,000 2020 2019 Inventory 229,000 162,000 Sales revenue $890,000 $786,000 Prepaid expenses 30,000 25,000 641,000 Cost of goods sold 575,000 Land 130,000 130,000 Gross profit 249,000 211,000 Building and equipment (net) 264,000 185,000 194,000 Operating expenses 159,000 $884,000 $695,000 Total assets $ 55,000 $ 52,000 Net income Liabilities and Stockholders' Equity Additional information: $172,000 $102,000 Notes payable 65,000 Accounts payable 51,000 Inventory at the beginning of 2019 was $116,000. 1. Accrued liabilities 41,000 41,000 Accounts receivable (net) at the beginning of 2019 were $90,000. 2. Bonds payable, due 2023 250,000 172,000 Total assets at the beginning of 2019 were $642,000. 3. Common stock, $10 par 202,000 202,000 No common stock transactions occurred during 2019 or 2020. 4. 154,000 Retained earnings 127,000 All sales were on account. 5. $884,000 $695,000 Total liabilities and stockholders' equity Compute the liquidity and profitability ratios of Cullumber Company for 2019 and 2020. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If % change is a decrease show the numbers as negative, e.g. -1.83% or (1.83%).) 2019 % Change 2020 LIQUIDITY Current ratio 1.76 :1 -10.02 % 1.96 :1 Accounts receivables turnover 8.99 times 8.73 times 2.94 % 3.28 times Inventory turnover 4.14 times -20.74 % % Change 2019 2020 PROFITABILITY Profit margin 6.62 % 6.18 % -6.59 % Asset turnover 1.18 times -4.12 % 1.13 times Return on assets 6.97 % 7.78 % -10.41 % Earnings per share %$1 5.77 % 2.72 2.57 (b) The following are three independent situations and a ratio that may be affected. For each situation, compute the affected ratio (1) as of December 31, 2020, and (2) as of December 31, 2021, after giving effect to the situation. (Round all answers to 2 decimal places, e.g. 1.83 or 1.83%. If % change is a decrease show the numbers as negative, e.g. -1.83% or (1.83%).) Situation Ratio 18,000 shares of common stock were sold at par on July 1, 2021. Net income for 2021 was $53,000. Return on common stockholders' 1. equity Debt to assets ratio All of the notes payable were paid in 2021. All other liabilities remained at their December 31, 2020, levels. At December 31, 2021, total assets were $904,000. 2. The market price of common stock was $9.00 and $13.00 on December 31, 2020 and 2021, respectively. Net income for 2021 was $53,000. Price-earnings ratio 3. % Change 2020 2021 х Return on common stockholders' equity 15.45 % 13.87 1.58 Debt to assets ratio 34.07:% 59.73 % 39.38 % Price earnings ratio 3.31 times 4.78 times -44.41%