Comparative financial statement data of Hamden Optical Mart follow:

Requirement 1. Calculate the following ratios for 2018 and 2017:

a. Current ratio

b. Quick (acid-test) ratio

c. Receivable turnover and days' sales outstanding (DSO)- round to the nearest whole day

d. inventory turnover and days' inventory outstanding (DIO)- round to the nearest whole day

e. Accounts payable turnover and days' payable outstanding (DPO)- use cost of goods sold in the numerator of the turnover ratio and round DPO to the nearest whole day

f. cash conversion cycle (in days)

g. Times-interest-earned ratio

h. Return on assets-use Dupont Analysis

i. Return on common stockholders' equity-use Dupont Analysis

j. Earning per share of common stock

k. Price-earnings ratio

Requirement 2. Decide whether (a) Hamden Optical Mart's financial position improved or deteriorated during 2018 and (b) the investment attractiveness of the company's common stock appears to have increased or decreased from 2017 to 2018.

Requirement 3. How will what you learned in this problem help you evaluate an investment?

Other information:

1. Market price of Hamden Optical Mart common stock: $48.15 at December 31, 2018, and $39.96 at December 31, 2017

2. Common shares outstanding: 17,000 during 2018 and 16,000 during 2017

3. All sales on credit

4. Cash dividends paid per share: $1.10 in 2018 and $0.80 in 2017

Hamden Optical Mart Comparative Balance Sheets December 31, 2018 and 2017 2018 2017 2016* Current assets: Cash 39,000 $ 43,000 Current receivables, net 214,000 152,000 $ 139,000 Inventories 188,000 293,000 9,000 280,000 30,000 Prepaid expenses Total current assets 555,000 287,000 505,000 279,000 Property, plant, and equipment, net $ 842,000 $ 784,000 Total assets 700,000 Accounts payable 108,000 $ 120,000 $ 141,000 98,000 195,000 Other current liabilties Total current liabilities 261,000 243,000 293,000 232,000 Long-term liabilities Hamden Optical Mart Comparative Income Statements Years Ended December 31, 2018 and 2017 2018 2017 Net sales $ 673,000 $ 595,000 278,000 382,000 Cost of goods sold Gross profit 291,000 125,000 317,000 145,000 Operating expenses Income from operations 166,000 35,000 172,000 49,000 Interest expense Income before income tax Income tax expense 131,000 40,000 123,000 52,000 $ 91,000 $ 71,000 Net income Total liabilities 504,000 338,000 525,000 259,000 Common stockholders' equity, no par 197,000 $ 842,000 $ 784,000 Total liabilities and stockholders' equity * Selected 2016 amounts