## Financial Ratios Analysis ### Inventory Turnover - **2022:** - **Numerator:** Cost of Sales = $1,994,471 (Incorrect) - **Denominator:** Average Inventory = $362,861 (Correct) - **Inventory Turnover Ratio:** 5.50 - **2021:** - **Numerator:** Cost of Sales = $2,104,480 (Incorrect) - **Denominator:** Average Inventory = $378,483 (Correct) - **Inventory Turnover Ratio:** 5.56 ### Current Ratio - **2022:** - **Numerator:** Current Assets = $1,160,800 (Correct) - **Denominator:** Current Liabilities = $480,402 (Correct) - **Current Ratio:** 2.42 - **2021:** - **Numerator:** Current Assets = $1,325,488 (Correct) - **Denominator:** Current Liabilities = $462,401 (Correct) - **Current Ratio:** 2.87 ### Quick Ratio - **2022:** - **Numerator:** Total Assets = $919,974 (Incorrect) - **Denominator:** Current Liabilities = $480,402 (Correct) - **Quick Ratio:** 1.92 - **2021:** - **Numerator:** Total Assets = $809,348 (Incorrect) - **Denominator:** Current Liabilities = $462,401 (Correct) - **Quick Ratio:** 1.75 ### Cash Flow Ratio - **2022:** - **Numerator:** Cash Flow from Operations = $521,817 (Incorrect) - **Denominator:** Current Liabilities = $462,402 (Incorrect) - **Cash Flow Ratio:** 1.13 - **2021:** - **Numerator:** Cash Flow from Operations = $604,171 (Incorrect) - **Denominator:** Current Liabilities = $480,402 (Correct) - **Cash Flow Ratio:** 1.26 **Note:** The analysis notes discrepancies in the values used for calculations in several places as indicated by checkmarks or crosses for correctness. The following is the balance sheet and income statement for Metro Eagle Outfitters, in condensed form, plus some information from the cash flow statement. ### Balance Sheet **2022** - Cash and short-term investments: $649,992 - Accounts receivable: $48,221 - Inventory: $351,452 - Other current assets: $111,135 - Total current assets: $1,160,800 - Long-lived assets: $573,332 - **Total assets:** $1,734,132 **2021** - Cash and short-term investments: $764,044 - Accounts receivable: $42,210 - Inventory: $405,514 - Other current assets: $113,720 - Total current assets: $1,325,488 - Long-lived assets: $618,982 - **Total assets:** $1,944,470 **2020** - Cash and short-term investments: $753,693 - Accounts receivable: $40,521 - Inventory: $320,208 - Other current assets: $97,988 - Total current assets: $1,212,410 - Long-lived assets: $565,302 - **Total assets:** $1,777,712 **Liabilities** **2022** - Current liabilities: $480,402 - Total liabilities: $511,045 - Shareholders’ equity: $1,223,087 - **Total liabilities and equity:** $1,734,132 **2021** - Current liabilities: $462,401 - Total liabilities: $523,486 - Shareholders’ equity: $1,420,984 - **Total liabilities and equity:** $1,944,470 **2020** - Current liabilities: $406,837 - Total liabilities: $422,841 - Shareholders’ equity: $1,354,871 - **Total liabilities and equity:** $1,777,712 ### Income Statement **2022** - Sales: $3,479,602 - Cost of sales: $2,104,480 - Gross margin: $1,375,122 - Operating expenses: $971,184 - Earnings before interest and taxes: $403,938 - Net income: $251,108 - Interest paid in cash