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Q2.

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[The following information applies to the questions displayed below.] The balance sheets for Federer Sports Apparel for 2022 and 2021 are presented below.

2. Prepare a horizontal analysis for 2022 using 2021 as the base year. (Note: If the percentage increase or decrease cannot be calculated, then leave the cell blank. Decreases should be indicated by a minus sign. Round your percentage answers to 1 decimal place.)

rev: 12_13_2019_QC_CS-193224

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Q3.

The 2021 income statement of Adrian Express reports sales of $13,797,000, cost of goods sold of $7,923,500, and net income of $1,530,000. Balance sheet information is provided in the following table.

ADRIAN EXPRESS Balance Sheets December 31, 2021 and 2020
	2021				2020
Assets
Current assets:
Cash	$	530,000			$	690,000
Accounts receivable		1,260,000				930,000
Inventory		1,660,000				1,330,000
Long-term assets		4,730,000				4,170,000
Total assets	$	8,180,000			$	7,120,000
Liabilities and Stockholders' Equity
Current liabilities	$	1,950,000			$	1,590,000
Long-term liabilities		2,230,000				2,330,000
Common stock		1,860,000				1,860,000
Retained earnings		2,140,000				1,340,000
Total liabilities and stockholders' equity	$	8,180,000			$	7,120,000

Industry averages for the following four risk ratios are as follows:

Average collection period	25 days
Average days in inventory	60 days
Current ratio	2 to 1
Debt to equity ratio	50%

Required: 1. Calculate the four risk ratios listed above for Adrian Express in 2021. (Use 365 days in a year. Round your answers to 1 decimal place.)

2. Do you think the company is more risky or less risky than the industry average?

• More risky

• Less risky

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