Comparative financial statement data of McClaine Optical Mart follow:

Other information:
1. Market price of McClaine common stock: $89.38 at December 31, 2014, and $85.67 at December 31, 2013
2. Common shares outstanding: 15,000 during 2014 and 10,000 during 2013
3. All sales on credit
Requirements
1. Compute the following ratios for 2014 and 2013:
a. Current ratio
b. Quick (acid-test) ratio
c. Receivables turnover and days€™ sales outstanding (DSO); round to nearest whole day
d. Inventory turnover and days€™ inventory outstanding (DIO); round to nearest whole day
e. Accounts payable turnover and days€™ payable outstanding (DPO); (use cost of goods sold in the turnover ratio and round DPO to nearest whole day
f. Cash conversion cycle (in days)
g. Times-interest-earned ratio
h. Return on assets; use DuPont Analysis
i. Return on common stockholders€™ equity; use DuPont Analysis
j. Earnings per share of common stock
k. Price-earnings ratio
2. Decide whether
(a) McClaine€™s financial position improved or deteriorated during 2014
(b) The investment attractiveness of McClaine€™s common stock appears to have increased or decreased.
3. How will what you learned in this problem help you evaluate aninvestment?

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A1 McClaine Optical Mart Comparative Income Statements Years Ended December 31, 2014 and 2013 2014 2013 $986,000 680,000 306,000 127,000 179,000 30,000 $892,000 581,000 3 Net sales Cost of goods sold Gross profit Operating expenses Income from operations 148,000 163,000 50,000 8 Interest expense 9 Income before income tax 10 Income tax expense 11 Net income 149,000 113,000 41,000 72,000 41,000 S108,000 A1 McClaine Optical Mart Comparative Balance Sheets December 31, 2014 and 2013 2014 2013 2012 Current assets: Cash Current receivables, net 32,000 $ 82,000 5 227,000 157,000 $200,000 297,000294,000 258,000 Inventories 7 Prepaid expenses 7000 29,000 Total current assets 563,000562,000 261,000 Property, plant, and equipment, net Total assets 273,000 000 $823,000 701,000 12 Accounts payable $150,000 $105,000 112,000 Other current liabilities Total current liabilities 187,000 285,000292,000 240,000233,000 525,000525,000 298,000 $836,000$823,000 135,000 15 Long-term liabilities 16 Total liabilities 18 Total liabilities and stockholders' equity Selected 2012 amounts. Common stockholders' equity, no par 311,000 199,000