Excerise 13-8 Liquity analysis and interpretation LO P3

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Required information Exercise 13-8 Liquidity analysis and interpretation LO P3 [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. At December 31 2017 2016 2015 Assets Cash $ 31,800 $ 35,625 $ 37,800 Accounts receivable, net 89,500 62,500 50,200 Merchandise inventory 112,500 82,500 54,000 Prepaid expenses 10,700 9,375 5,000 Plant assets, net 278,500 255,000 230,500 Total assets $523,000 $445,000 $377,500 Liabilities and Equity Accounts payable $129,900 $ 75,250 $ 51,250 Long-term notes payable secured by mortgages on plant assets 98,500 101,500 83,500 Common stock, $10 par value 163,500 163,500 163,500 Retained earnings 131,100 104,750 79,250 Total liabilities and equity $523,000 $445,000 $377,500 The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit: For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses Net income Earnings per share 2017 $673,500 $411, 225 209,550 12, 100 9,525 642,400 $ 31, 100 $ 1.90 2016 $532,000 $345,500 134,980 13,300 8,845 502,625 $ 29,375 $ 1.80 Exercise 13-8 Part 2 (2) Compute accounts receivable turnover. Accounts Receivable Turnover Choose Denominator: Choose Numerator: Accounts Receivable Turnover Accounts receivable turnover o times 0 times 1 2017: 2016: 1 Exercise 13-8 Part 3 (3) Compute inventory turnover. Choose Numerator: = Inventory Turnover 1 Choose Denominator: 1 1 / Inventory Turnover Inventory turnover times times 11 2017: 2016: Il Exercise 13-8 Part 4 (4) Compute days' sales in inventory. Choose Numerator: Days' Sales In Inventory 1 Choose Denominator: x Days = Days' Sales In Inventory x = Days' sales in inventory X days days 2017: 2016: X 11