204 Comparative financial statement data of Hamden Optical Mart follow: Earnings per Requirement 2 Current ratio Debt ratio Transaction (letter) LEARNI Use ratic investmi D B A Hamden Optical Mart Comparative Income Statement Years Ended December 31, 2017 and 2016 2 3 Net sales 4 Cost of goods sold 5 Gross profit 7 Operating expenses 1 Income from operations Interest expense Income before income tax 10 Income tax expense 11 Net income 12 2017 $ 687.000 375.000 312.000 129,000 183.000 37.000 146,000 36,000 $ 110,000 2016 $ 595.000 276,000 319,000 142.000 177.000 45,000 132,000 51,000 $ 81.000 D E A Hamden Optical Mart Comparative Balance Sheet December 31, 2017 and 2016 2017 2016 2015 2 3 Current assets: 4 Cash 5 Current receivables, net 6 Inventories 7 Prepaid expenses Total current assets 9 Property, plant, and equipment, net 16 Total assets 11 Accounts payable 12 Other current liabilities 1 Total current liabilities 14 Long-term liabilities 15 Total liabilities 16 Common shareholders equity, no par Total liabilities and shareholders' equity $ 45,000 $49.000 212.000 158,000 $200,000 297,000 281.000 181,000 4,000 29.000 558,000 517.000 285.000 277.000 S 843.000 $ 794.000 700,000 150.000 105,000 112.000 135.000 188,000 $285,000 $293,000 243.000 231.000 528,000 524,000 315.000 270.000 $843.000 $ 794.000 17 199,000 CHAPTER ELEVEN I FINANCIAL STATEMENT ANALYSIS Other information: 1. Market price of Hamden common shares: $102.17 at December 31, 2017; and $77. 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 ne whole day) d. Inventory turnover and days' inventory outstanding (DIO) (round to the n whole day) e. Accounts payable turnover and days' payable outstanding (DPO) (round to the 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 20 (b) the investment attractiveness of Hamden's common shares appears to have incre decreased 3. How will what you learned in this problem help you evaluate an investment? P11-31A Assume that you are considering purchasing shares as an investment. You ha rowed the choice to two Internet firms, Video.com Inc. and On-Line Express Ltd., ar assembled the following data. Selected income statement data for current year: two Exp Video 603 000 $515