1. Basic Financial Ratios

   The accounting staff of CCB Enterprises has completed the financial statements for the 2017 calendar year. The statement of income for the current year and the comparative statements of financial position for 2017 and 2016 follow.

   CCB Enterprises
   Statement of Income
   For the Year Ended December 31, 2017
   (thousands omitted)
   Revenue:
   Net sales	$809,620
   Other	59,500
   Total revenue	$869,120
   Expenses:
   Cost of goods sold	$536,240
   Research and development	24,360
   Selling and administrative	154,000
   Interest	19,580
   Total expenses	$734,180
   Income before income taxes	$134,940
   Income taxes	53,976
   Net income	$80,964

   CCB Enterprises
   Comparative Statements of Financial Position
   December 31, 2017 and 2016
   (thousands omitted)
   	2017	2016
   Assets
   Current assets:
   Cash and short-term investments	$25,810	$21,140
   Receivables, less allowance for doubtful accounts
   ($1,070 in 2017 and $1,370 in 2016)	47,810	50,060
   Inventories, at lower of FIFO cost or market	65,180	62,160
   Prepaid items and other current assets	5,170	2,980
   Total current assets	$143,970	$136,340
   Other assets:
   Investments, at cost	$105,890	$105,890
   Deposits	10,030	8,300
   Total other assets	$115,920	$114,190
   Property, plant, and equipment:
   Land	$11,770	$11,770
   Buildings and equipment, less accumulated depreciation
   ($126,980 in 2017 and $121,620 in 2016)	267,510	248,280
   Total property, plant, and equipment	$279,280	$260,050
   Total assets	$539,170	$510,580
   Liabilities and Owners Equity
   Current liabilities:
   Short-term loans	$22,270	$24,240
   Accounts payable	72,260	71,060
   Salaries, wages, and other	26,290	26,840
   Total current liabilities	$120,820	$122,140
   Long-term debt	$160,530	$171,080
   Total liabilities	$281,350	$293,220
   Owners equity:
   Common stock, at par	$44,170	$41,810
   Paid-in capital in excess of par	63,700	60,890
   Total paid-in capital	$107,870	$102,700
   Retained earnings	149,950	114,660
   Total owners equity	$257,820	$217,360
   Total liabilities and owners equity	$539,170	$510,580

   Required:

   1. Calculate the following financial ratios for 2017 for CCB Enterprises:

   Round items h, j, and k to the nearest whole number. Round all other answers to two decimal places. Assume a 360-day year.

   a. Times interest earned	________ to 1
   b. Return on total assets	__________%
   c. Return on common stockholders' equity	__________ %
   d. Debt-to-equity ratio (at December 31, 2017)	___________ 1
   e. Current ratio (at December 31, 2017)	____________ to 1
   f. Quick (acid-test) ratio (at December 31, 2017)	_____________ to 1
   g. Accounts receivable turnover ratio (Assume that all sales are on credit.)	____________ times
   h. Number of days' sales in receivables	____________ days
   i. Inventory turnover ratio (Assume that all purchases are on credit.)	_____________ times
   j. Number of days' sales in inventory	______________ days
   k. Number of days in cash operating cycle	______________ days

   2. Which of the following statements pertaining to ratio analysis of CCB Enterprises is true?