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Quick Check Liberty Corporacion reporned the following financlal watements Financial Statement Analysis 103 ger share UBERTY CORPORATION Comparative Balance Sheet December 31, 2017 and 2016 -54 sme 2-33.6 tme 2017 2014 Assets Current Assets Cash and Cash Equivalents 53.6% S 2,450 2.094 Accounts Receivable 1813 1611 Merchandise lInventorys 1,324 41.8 % 1,060 Prepaid Expenses 1,709 2.120 Total Current Assets 7,296 6.885 Other Assets 18.500 $25,796 15.737 Total Assets $ 22.422 se of return Liabilities ta, it is Current Liabilities S 7230 S 8467 ed in the Long-term Liabilities 4.798 3.792 Total Liabilities 12.028 12.259 Stockholders' Equity 6.568 4,363 Common Stock, no pan 6.000 7.200 Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity 13,768 10.363 $ 25,796 $ 22.622 LIBERTY CORPORATION Income Statement Year Ended December 31, 2017 $ 20,941 Net Sales 7,055 Cost of Goods Sold 13,886 Gross Profit 7,065 Operating Expenses 6,821 Operating Income 210 Interest Expense 6.611 2,563 Income Before Income Taxes S 4,048 Income Tax Expense- Net Income CHAPTER 2 3. Vertical analysis of Liberty's balance sheet for 2017 would report a. Cash as 9.50% of total assets b. inventory turnover of 6 times. rning Objective 3 c. a current ratio of 1.01. d. a 17% increase in Cash. 7 8 4. Which statement best describes Liberty's acid-test ratio for 2017? Greater than 1 ming Objective 4 9 c. Less than 1 a. b. Equal to 1 d. None of the above 10 ng Objective 4 5. Liberty's inventory turnover during 2017 (amounts rounded) was a. 6 times. 11 c. 8 times. b. 7 times. d. not determinable from the data gin 12 g Objective 4 6. Assume all sales are on credit. During 2017, Liberty's days' sales in receivables ratio was (amounts rounded) 13 14A 34 days. c. 32 days b. 30 days. a. d. 28 days 15a Objective 4 7. Which measure expresses Liberty's times-interest-earned ratio? (amounts rounded) a. 54.7% b. 19 times 34.5% d. 32 times C. SH Objective 4 8. Liberty's rate of return on common stockholders' equity can be described as S2 a. weak. b. normal. d. average c. strong. bjective 4 9. The company has 2,500 shares of common stock outstanding. What is Liberty's earn- ings per share? S2 $1.62 b. $1.75 a. c. $2.73 d. 2.63 times jective 5 endix 2A 10A. In order for an item to be reported in the extraordinary items section of the income statement, it must be a. unusual. c. unusual or infrequent. d. unusual and infrequent. b. infrequent. Check your answers at the end of the chapter