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Required information [The following information applies to the questions displayed below.] Income statements and balance sheeRequired: 1. Calculate the following risk ratios for 2021 and 2022: (Round your answers to 1 decimal place.) 2021 2022 Receiv2. Calculate the following profitability ratios for 2021 and 2022: (Round your answers to 1 decimal place.) 2021 2022 Gross p

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Answer #1

1. Risk Ratios:

2021 2022
Receivables Turnover Ratio 40.1 times 41.4 times
Inventory Turnover Ratio 15.5 times 20.3 times
Current Ratio 4.1 to 1 2.7 to 1
Debt Equity Ratio 72.0 % 145.5 %

2. Profitability Ratios:

2021 2022
Gross Profit Ratio 36.2 % 29.8 %
Return on Assets 16.2 % 2.8 %
Profit Margin 4.5 % 0.8 %
Asset Turnover 3.6 times 3.6 times

Receivables turnover = Net Sales / Average Receivables

Inventory Turnover = Cost of Goods Sold / Average Inventory

Current Ratio = Total Current Assets / Total Current Liabilities

Debt to Equity ratio = Total Liabilities / Total Stockholders Equity

Gross Profit ratio = Gross Profit / Net Sales

Return on Assets = Net Income / Average Total Assets

Profit Margin = Net Income / Net Sales

Asset Turnover = Net Sales / Average Total Assets

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