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The 2023 financial statements of Outdoor Waterworks Inc. follow:

Outdoor Waterworks Inc.
Income Statement
For Year Ended December 31, 2023
Net sales	$	1,076,000
Cost of goods sold:
Inventory, Dec. 31, 2022	$	80,860
Purchases		611,840
Goods available for sale	$	692,700
Inventory, Dec. 31, 2023		60,690
Cost of goods sold		632,010
Gross profit from sales	$	443,990
Operating expenses		284,360
Operating profit	$	159,630
Interest expense		12,500
Profit before taxes	$	147,130
Income taxes		19,414
Profit	$	127,716

Outdoor Waterworks Inc.
Balance Sheet
December 31, 2023
Assets
Cash	$	23,300
Current non-strategic investments		25,800
Accounts receivable, net		53,180
Notes receivable		11,660
Inventory		60,690
Prepaid expenses		5,980
Plant and equipment, net		332,020
Total assets	$	512,630
Liabilities and Equity
Accounts payable	$	49,280
Accrued wages payable		6,460
Income taxes payable		7,290
Long-term note payable, secured by mortgage on plant		117,300
Common shares, 160,000 shares		197,500
Retained earnings		134,800
Total liabilities and equity	$	512,630

Assume all sales were on credit. Also assume the long-term note payable is due in 2026, with no current portion. On the December 31, 2022, balance sheet, the assets totalled $438,220, common shares were $197,500, and retained earnings were $110,940. Required: Calculate the following: (Use 365 days in a year. Do not round your intermediate calculations. Round the answers to 2 decimal places.)

a. Current ratio (to 1)

b. Quick ratio (to 1)

c. Days sales uncollected (days)

d. Inventory turnover (times)

e. Days sales in inventory (days)

f. Ratio of pledged plant assets to secured liabilities (to 1)

g. Times interest earned (times)

h. Profit margin (%)

i. Total asset turnover (times)

j. Return on total assets (%)

k. Return on common shareholders equity (%)

Analysis Component: Identify whether the ratios calculated above are favourable or unfavourable to the industry averages. Industry Average

a. Current ratio 1.6:1

b. Quick ratio 1.1:1

c. Days sales uncollected 21days

d. Inventory turnover 5times

e. Days sales in inventory 70days

f. Ratio of pledged plant assets to secured liabilities 1.4:1

g. Times interest earned 50times

h. Profit margin 14%

i. Total asset turnover 2.3times

j. Return on total assets 20%

k. Return on common shareholders equity 32.7%

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