Comparative financial statement data of Carlton Optical Mart follow: LOADING...(Click on the icon to view the income statements.) LOADING...(Click on the icon to view the balance sheets.) Read the requirements LOADING.... Other information: 1. Market price of Carlton Optical Mart common stock: $85.68 at December 31, 2018, and $63.72 at December 31, 2017 2. Common shares outstanding: 14 comma 000 during 2018 and 13 comma 000 during 2017 3. All sales on credit 4. Cash dividends paid per share: $ 1.00 in 2018 and $ 0.40 in 2017 Requirement 1. Calculate the ratios for 2018 and 2017. (Abbreviations used: Avg = average and o/s = outstanding.) a. Current ratio Select the formula and then enter the amounts to calculate the current ratio for 2018 and 2017. (Round the ratios to two decimal places, X.XX.) / = Current ratio 2018 / = 2017 / = b. Quick (acid-test) ratio Select the formula and then enter the amounts to calculate the quick (acid-test) ratio for 2018 and 2017. (Round the ratios to two decimal places, X.XX.) ( ) / = Quick (acid-test) ratio 2018 ( ) / = 2017 ( ) / = c. Receivables turnover and days' sales oustanding (DSO)long dashround to the nearest whole day Begin by selecting the formula and then enter the amounts to calculate receivables turnover for 2018 and 2017. (Round the ratios to two decimal places, X.XX.) / = Accounts receivable turnover 2018 / = 2017 / = Now select the formula and enter the amounts to calculate days' sales oustanding (DSO) (round to the nearest whole day). (Enter formula ratios to two decimal places, X.XX. Use a 365-day year and round the DSO to the nearest whole day, X.) / = Days' sales outstanding (DSO) 2018 / = 2017 / = d. Inventory turnover and days' inventory outanding (DIO)long dashround to the nearest whole day Begin by selecting the formula and then enter the amounts to calculate the inventory turnover for 2018 and 2017. (Round the ratios to two decimal places, X.XX.) / = Inventory turnover 2018 / = 2017 / = Now select the formula and enter the amounts to calculate days' inventory outanding (DIO) (round to the nearest whole day). (Enter formula ratios to two decimal places, X.XX. Use a 365-day year and round the DIO to the nearest whole day, X.) / = Days' inventory outstanding (DIO) 2018 / = 2017 / = e. Accounts payable turnover and days' payable outstanding (DPO)long dashuse cost of goods sold in the numerator of the turnover ratio and round DPO to the nearest whole day Begin by selecting the formula and then enter the amounts to calculate the accounts payable turnover for 2018 and 2017. (Round the ratios to two decimal places, X.XX.) / = Accounts payable turnover 2018 / = 2017 / = Now select the formula and enter the amounts to calculate days' payable outanding (DPO) (round to the nearest whole day). (Enter formula ratios to two decimal places, X.XX. Use a 365-day year and round the DPO to the nearest whole day, X.) / = Days payable outstanding (DPO) 2018 / = 2017 / = f. Cash conversion cycle (in days) + - = Cash conversion cycle 2018 + - = 2017 + - = g. Times-interest-earned ratio Select the formula and then enter the amounts to calculate the times-interest-earned ratio for 2018 and 2017. (Round the ratios to one decimal place, X.X.) / = Times-interest-earned ratio 2018 / = 2017 / = h. Return on assetslong dashuse DuPont Analysis Select the formula and then enter the amounts to calculate the return on assets (ROA) for 2018 and 2017. (Round percentages to the nearest one-tenth percent, X.X%, and other component ratios to three decimal places, X.XXX. Ignore interest expense in your analysis.) x = ROA 2018 % x = % 2017 % x = % i. Return on common stockholders' equitylong dashuse DuPont Analysis Select the formula and then enter the amounts to calculate the return on common stockholders' equity (ROE) for 2018 and 2017. (Round percentages to the nearest one-tenth percent, X.X% and other component ratios to three decimal places, X.XXX. Ignore interest expense in your analysis.) x = ROE 2018 % x = % 2017 % x = % j. Earnings per share of common stock Select the formula and then enter the amounts to calculate earnings per share (EPS) for 2018 and 2017. (Complete all answer boxes. For zero amounts, enter "0" in the appropriate cell. Round EPS to the nearest cent, X.XX.) ( - ) / = EPS 2018 ( - ) / = 2017 ( - ) / = k. Price-earnings ratio Select the formula and then enter the amounts to calculate the price-earnings (P/E) ratio for 2018 and 2017. (Enter formula amounts to two decimal places, X.XX. Round the P/E ratios to one decimal place, X.X, as needed.) / = P/E ratio 2018 / = 2017 / = Requirement 2. a. Decide whether Carlton Optical Mart's financial position improved or deteriorated during 2018. The company's financial position deteriorated improved during 2018 as shown by the decrease increase in the current ratio, quick ratio, and times-interest-earned ratio. market price per share. return on assets, return on equity, and earnings per share. Requirement 2. b. Decide whether the investment attractiveness of the company's common stock appears to have increased or decreased from 2017 to 2018. The common stock's attractiveness increased decreased during 2018, as shown by the decrease increase in the current ratio, inventory turnover, and times-interest-earned ratio. market price per share, earnings per share, and dividends per share. The price-earnings ratio decreased slightly. increased slightly. stayed the same. Requirement 3. How will what you learned in this problem help you evaluate an investment? This problem gives you practice in computing and evaluating several of the ratios used in financial statement preparation. investment analysis. By analyzing the two-year trends in the ratios, you can see whether the company's abilities to acquire assets, raise capital, and pay dividends pay its debts, sell its inventory, and generate profits have improved or deteriorated during this period. Deteriorating Improving ratio values generally indicate an attractive investment, and deteriorating improving ratio values usually signal an unattractive investment. Choose from any list or enter any number in the input fields and then continue to the next question.

Carlton Optical Mart
Comparative Income Statements
Years Ended December 31, 2018 and 2017
			2018	2017
		Net sales	$685,000	$591,000
		Cost of goods sold	375,000	281,000
		Gross profit	310,000	310,000
		Operating expenses	131,000	149,000
		Income from operations	179,000	161,000
		Interest expense	38,000	46,000
		Income before income tax	141,000	115,000
		Income tax expense	41,000	46,000
		Net income	$100,000	$69,000

Carlton Optical Mart

Comparative Balance Sheets

December 31, 2018 and 2017

2018

2017

2016*

Current assets:

Cash

$38,000

$88,000

Current receivables, net

215,000

153,000

$140,000

Inventories

296,000

282,000

190,000

Prepaid expenses

10,000

26,000

Total current assets

559,000

549,000

Property, plant, and equipment, net

285,000

277,000

Total assets

$844,000

$826,000

705,000

Accounts payable

$150,000

$94,000

104,000

Other current liabilties

127,000

182,000

Total current liabilities

277,000

276,000

Long-term liabilities

246,000

238,000

Total liabilities

523,000

514,000

Common stockholders' equity, no par

321,000

312,000

192,000

Total liabilities and stockholders' equity

$844,000

$826,000

* Selected 2016 amounts.