Comparative financial statement data of Hamden Optical Mart follow:

*Selected 2015 amounts.
Other information:
1. Market price of Hamden common shares: $102.17 at December 31, 2017; and $77.01 at
December 31, 2016
2. Average common shares outstanding: 18,000 during 2017 and 17,500 during 2016
3. All sales on credit
Requirements
1. Compute the following ratios for 2017 and 2016:
a. Current ratio
b. Quick (acid-test) ratio
c. Receivables turnover and days' sales outstanding (DSO) (round to the nearest whole day)
d. Inventory turnover and days' inventory outstanding (DIO) (round to the nearest whole day)
e. Accounts payable turnover and days' payable outstanding (DPO) (round to the nearest whole day)
f. Cash conversion cycle (in days)
g. Times-interest-earned ratio
h. Return on assets
i. Return on common shareholders' equity
j. Earnings per share of common shares
k. Price/earnings ratio
2. Decide whether
(a) Hamden's financial position improved or deteriorated during 2017 and
(b) The investment attractiveness of Hamden's common shares appears to have increased or decreased.
3. How will what you learned in this problem help you evaluate an investment?

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Hamden Optical Mart Comparative Income Statement Years Ended December 31, 2017 and 2016 2 2017 2016 $687,000 $595,000 276,000 319,000 142,000 177,000 45,000 132,000 51,000 3 Net sales 4 Cost of 5 Gross profit 6 Operating expenses s sold 7 Income from operations 8 Interest 9 Income before income tax 10 Income tax 11 Net income 12 375,000 312,000 129,000 183,000 37,000 146,000 36,000 nse Hamden Optical Mart Comparative Balance Sheet December 31, 2017 and 2016 2 3 Current assets: 4 2017 2016 2015* $ 45,000 49,000 Current receivables, net 212,000 158,000 200,000 297,000 281,000181,000 6 7 Prepaid expenses Inventories 29,000 558,000 517,000 285,000 277,000 4,000 Total current assets lant, and e net 10 Total assets 11 Accounts payable 12 Other current liabilities 13 Total current liabilities 14 Long-term liabilities 15 Total liabilities 16 Common shareholders' equity, no par 17 Total liabilities and shareholders' equit 18 000 700.000 50,000 105,000 112,000 135,000 188,000 $285,000 293,000 43,000 231,000 528,000 524,000 315,000 270,000 199,000 $843,000 794,000