Exercise 11-8 (Static) Effect of transactions on various financial ratios Indicate the effect that each transaction/event listed here will have on the financial ratio listed opposite it. Use + for increase, - for decrease, and (NE) for no effect. Assume that current assets exceed current liabilities in all cases, both before and after the transaction/event. Transaction/Event a. Purchased inventory on account. b. Sold inventory for cash, at a profit. c. Issued a 10% stock dividend. d. Issued common stock for cash. e. Sold land at a gain. f. Purchased treasury stock for cash. g. Accrued interest on a note payable. h. Accrued wages that have been earned by employees. i. Purchased equipment for cash. j. Issued bonds at an interest rate that is less than the company's ROI. Financial Ratio Effect Number of days' sales in inventory Inventory turnover Earnings per share Debt ratio Return on investment Debt/equity ratio Times interest earned Current ratio Plant and equipment turnover Return on equity