Income statement and balance sheet data for The Athletic Attic are provided below. THE ATHLETIC ATTICIncome StatementsFor the Years Ended December 31 20252024Net sales$ 13,200,000$ 11,800,000Cost of goods sold8,600,0007,400,000Gross profit4,600,0004,400,000Expenses: Operating expenses1,800,0001,750,000Depreciation expense200,000200,000Interest expense60,00060,000Income tax expense640,000550,000Total expenses2,700,0002,560,000Net income$ 1,900,000$ 1,840,000 THE ATHLETIC ATTICBalance SheetsDecember 31 202520242023Assets Current assets: Cash$ 245,000$ 175,000$ 244,000Accounts receivable1,010,000760,000780,000Inventory1,745,0001,375,0001,045,000Supplies150,000120,00095,000Long-term assets: Equipment1,900,0001,900,0001,900,000Less: Accumulated depreciation(800,000)(600,000)(400,000)Total assets$ 4,250,000$ 3,730,000$ 3,664,000Liabilities and Stockholders' Equity Current liabilities: Accounts payable$ 233,000$ 166,000$ 159,000Interest payable6,00006,000Income tax payable60,00055,00050,000Long-term liabilities: Notes payable700,000700,000700,000Stockholders' equity: Common stock800,000800,000800,000Retained earnings2,451,0002,009,0001,949,000Total liabilities and stockholders’ equity$ 4,250,000$ 3,730,000$ 3,664,000 Required:1. Calculate the following risk ratios for 2024 and 2025: (Round your answers to 1 decimal place.)Receivables turnover ratioInventory turnover ratioCurrent ratioDebt to equity ratio2024timestimes%2025timestimes%

Ratio analysis is one of the important technique used in management accounting. Under this, several…

Answered: Required: 1. Calculate the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Income statement and balance sheet data for The Athletic Attic are provided below.

	2025	2024
THE ATHLETIC ATTIC
Income Statements
For the Years Ended December 31
Net sales	$ 13,200,000	$ 11,800,000
Cost of goods sold	8,600,000	7,400,000
Gross profit	4,600,000	4,400,000
Expenses:
Operating expenses	1,800,000	1,750,000
Depreciation expense	200,000	200,000
Interest expense	60,000	60,000
Income tax expense	640,000	550,000
Total expenses	2,700,000	2,560,000
Net income	$ 1,900,000	$ 1,840,000

	2025	2024	2023
THE ATHLETIC ATTIC
Balance Sheets
December 31
Assets
Current assets:
Cash	$ 245,000	$ 175,000	$ 244,000
Accounts receivable	1,010,000	760,000	780,000
Inventory	1,745,000	1,375,000	1,045,000
Supplies	150,000	120,000	95,000
Long-term assets:
Equipment	1,900,000	1,900,000	1,900,000
Less: Accumulated depreciation	(800,000)	(600,000)	(400,000)
Total assets	$ 4,250,000	$ 3,730,000	$ 3,664,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 233,000	$ 166,000	$ 159,000
Interest payable	6,000	0	6,000
Income tax payable	60,000	55,000	50,000
Long-term liabilities:
Notes payable	700,000	700,000	700,000
Stockholders' equity:
Common stock	800,000	800,000	800,000
Retained earnings	2,451,000	2,009,000	1,949,000
Total liabilities and stockholders’ equity	$ 4,250,000	$ 3,730,000	$ 3,664,000

Required:
1. Calculate the following risk ratios for 2024 and 2025: (Round your answers to 1 decimal place.)
Receivables turnover ratio
Inventory turnover ratio
Current ratio
Debt to equity ratio
2024
times
times
%
2025
times
times
%

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