THE ATHLETIC ATTIC Income Statements For the years ended December 31 2022 2021 Net sales $10,400,000 $8,900,000 Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Interest expense Income tax expense Total expenses Net income 6,800,000 5,450,000 3,600,000 3,450,000 1,600,000 200,000 1,600,000 210,000 40,000 400,000 2,240,000 $ 1,360,000 $1,230,000 50,000 360,000 2,220,000 THE ATHLETIC ATTIC Balance Sheets December 31 2022 2021 2020 Assets Current assets: Cash $ 225,000 $ 164,000 $ 214,000 Accounts receivable 990,000 790,000 810,000 Inventory Supplies Long-term assets: Equipment Less: Accumulated depreciation Total assets 1,725,000 130,000 1,405,000 1,075,000 85,000 110,000 1,150,000 (210,000) $3,570,000 $3,199,000 $3,124,000 1,100,000 1,150,000 (600,000) (420,000) Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: $ 175,000 $ 115,000 $ 91,000 4,000 40,000 5,000 40,000 31,000 500,000 600,000 600,000 Common stock 600,000 700,000 700,000 Retained earnings Total liabilities and stockholders' equity $3,570,000 $3,199,000 $3,124,000 2,251,000 1,744,000 1,697,000
THE ATHLETIC ATTIC Income Statements For the years ended December 31 2022 2021 Net sales $10,400,000 $8,900,000 Cost of goods sold Gross profit Expenses: Operating expenses Depreciation expense Interest expense Income tax expense Total expenses Net income 6,800,000 5,450,000 3,600,000 3,450,000 1,600,000 200,000 1,600,000 210,000 40,000 400,000 2,240,000 $ 1,360,000 $1,230,000 50,000 360,000 2,220,000 THE ATHLETIC ATTIC Balance Sheets December 31 2022 2021 2020 Assets Current assets: Cash $ 225,000 $ 164,000 $ 214,000 Accounts receivable 990,000 790,000 810,000 Inventory Supplies Long-term assets: Equipment Less: Accumulated depreciation Total assets 1,725,000 130,000 1,405,000 1,075,000 85,000 110,000 1,150,000 (210,000) $3,570,000 $3,199,000 $3,124,000 1,100,000 1,150,000 (600,000) (420,000) Liabilities and Stockholders' Equity Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: $ 175,000 $ 115,000 $ 91,000 4,000 40,000 5,000 40,000 31,000 500,000 600,000 600,000 Common stock 600,000 700,000 700,000 Retained earnings Total liabilities and stockholders' equity $3,570,000 $3,199,000 $3,124,000 2,251,000 1,744,000 1,697,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Income statement and balance sheet data for The Athletic Attic are provided below.
Required:
1. Calculate the following risk ratios for 2021 and 2022:
a. Receivables turnover ratio. c.
b. Inventory turnover ratio. d. Debt to equity ratio.
2. Calculate the following profitability ratios for 2021 and 2022:
a. Gross profit ratio. c. Profit margin.
b. Return on assets. d. Asset turnover.
3. Based on the ratios calculated, determine whether overall risk and profitability improved from 2021 to 2022.
Transcribed Image Text:THE ATHLETIC ATTIC
Income Statements
For the years ended December 31
2022
2021
Net sales
$10,400,000 $8,900,000
Cost of goods sold
Gross profit
Expenses:
Operating expenses
Depreciation expense
Interest expense
Income tax expense
Total expenses
Net income
6,800,000 5,450,000
3,600,000 3,450,000
1,600,000
200,000
1,600,000
210,000
40,000
400,000
2,240,000
$ 1,360,000 $1,230,000
50,000
360,000
2,220,000
THE ATHLETIC ATTIC
Balance Sheets
December 31
2022
2021
2020
Assets
Current assets:
Cash
$ 225,000 $ 164,000 $ 214,000
Accounts receivable
990,000
790,000
810,000
Inventory
Supplies
Long-term assets:
Equipment
Less: Accumulated depreciation
Total assets
1,725,000
130,000
1,405,000
1,075,000
85,000
110,000
1,150,000
(210,000)
$3,570,000 $3,199,000 $3,124,000
1,100,000 1,150,000
(600,000)
(420,000)
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Interest payable
Income tax payable
Long-term liabilities:
Notes payable
Stockholders' equity:
$ 175,000 $ 115,000 $ 91,000
4,000
40,000
5,000
40,000
31,000
500,000
600,000
600,000
Common stock
600,000
700,000
700,000
Retained earnings
Total liabilities and stockholders' equity $3,570,000 $3,199,000 $3,124,000
2,251,000 1,744,000
1,697,000
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