The condensed comparative income statements and balance sheets of Basie Corporation appear on the next page. All figures are given in thousands of dollars, except earnings per share.

Additional data for Basie Corporation in 20x8 and 20x7 follow.

Balances of selected accounts at the end of 20x6 were accounts receivable (net), $52,700; inventory, $99,400; accounts payable, $64,800; total assets, $647,800; and stockholder’s equity, $376,600. All of the bonds payable were long-term liabilities.
Required Perform the following analyses. Round percentages and ratios to one decimal place.
1. Prepare a liquidity analysis by calculating for each year the

(a) current ratio,

(b) quick ratio,

(c) receivable turnover,

(d) days’ sales uncollected,

(e) inventory turnover,

(f) days’ inventory on hand, (g) payables turnover, and (h) days’ payable.
2. Prepare a profitability analysis by calculating for each year the

(a) profit margin,

(b) asset turnover,

(c) return on assets, and

(d) return on equity.
3. Prepare a long-term solvency analysis by calculating for each year the

(a) debt to equity ratio and

(b) interest coverage ratio.
4. Prepare a cash flow adequacy analysis by calculating for each year the

(a) cash flow yield,

(b) cash flows to sales,

(c) cash flows to assets, and

(d) free cash flow.
5. Prepare an analysis of market strength by calculating for each year the

(a) price/earnings (P/E) ratio and

(b) dividends yield.
6. User Insight: After making the calculations, indicate whether each ratio improved or deteriorated from 20x7 to 20x8 (use F for favorable and U for unfavorable and consider changes of .1 or less to be neutral).

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Basie Corporation Comparative Income Statements For the Years Ended December 31, 20x8 and 20x7 20x8 20x7 Net sales $800,400 $742,600 Cost of goods sold 454,100 396,200 Gross margin $346,300 $346,400 Operating expenses Selling expenses $130,100 $104,600 Administrative expenses 140,300 115,500 Total operating expenses $270,400 $220,100 Income from operations $ 75,900 $126,300 Interest expense 25,000 20,000 Income before income taxes. $ 50,900 $106,300 Income taxes expense 14,000 35,000 Net income $ 36,900 $ 71,300 Earnings per share $ 1.23 $ 2.38