Benson Corporation, a clothing retailer, engaged in the transactions listed in the first column of the table below. Opposite each transaction is a ratio and space to mark the effect of each transaction on the ratio.

Required User Insight: Show that you understand the effect of business activities on performance measures by placing an X in the appropriate column to show whether the transaction increased, decreased, or had no effect on the indicated ratio.
Comprehensive Ratio Analysis

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Transaction a. Issued common stock for cash. b. Declared cash dividend. c. Sold treasury stock. Ratio Asset turnover Effect Increase Decrease None Current ratio Return on equity d. Borrowed cash by issuing note payable. Debt to equity ratio e. Paid salaries expense. f. Purchased merchandise for cash. g. Sold equipment for cash. h. Sold merchandise on account. Inventory turnover Current ratio Receivable turnover Quick ratio i. Paid current portion of long-term debt. Return on assets j. Gave sales discount. Profit margin k. Purchased marketable securities for cash. Quick ratio 1. Declared 5% stock dividend. m. Purchased a building. Current ratio Free cash flow