Exercise 13-8 Analyzing and interpreting liquidity LO P3 [The following information applies to the questions displayed below.) Simon Company's year-end balance sheets follow. At December 31 Current Yr 1 Yr Ago 2 Yrs Ago Assets Cash $ 25,493 $ 29,798 $ 30,730 Accounts receivable, net 89, 100 62,200 50,600 Merchandise inventory 113,500 84,000 51,000 Prepaid expenses 8,209 7,822 3,414 Plant assets, net 195,775 188,660 174,656 Total assets $432,077 $ 372,489 $ 310,400 Liabilities and Equity Accounts payable $107,587 $ 62,949 $ 40,973 Long-term notes payable secured by mortgages on plant assets 81,230 85,670 68,598 Common stock, $10 par value 162,500 162,500 162,500 Retained earnings 80,760 61,361 38,329 Total liabilities and equity $432,077 $ 372, 480 $ 310,400 The company's income statements for the Current Year and 1 Year Ago, follow. Assume that all sales are on credit: For Year Ended December 31 Current Yr 1 Yr Ago Sales $ 561,700 $ 443,251 Cost of goods sold $ 342,637 $ 288,113 Other operating expenses 174,127 112, 143 Interest expense 9,549 10,195 Income tax expense 7,302 6,649 Total costs and expenses 533,615 417,100 Net income $ 28,085 $ 26, 151 $ Earnings per share 1.73 $ 1.61 Compute days' sales uncollected. Days' Sales Uncollected 1 Choose Denominator: Days Choose Numerator: #11 Days' Sales Uncollected Days' Sales Uncollected X Current Yr: = = o days 0 days 1 Yr Ago: Compute accounts receivable turnover. Accounts Receivable Turnover Choose Numerator: 1 Choose Denominator: Accounts Receivable Turnover 11 1 Accounts receivable turnover times ! Current Yr: times 1 Yr Ago: Compute inventory turnover. Inventory Turnover 1 Choose Denominator: Choose Numerator: Inventory Turnover 11 Inventory turnover Current Yr: times 1 Yr Ago: 11 times Compute days' sales in inventory. Days' Sales In Inventory Choose Denominator: 1 Choose Numerator: Days E / Days' Sales In Inventory Days' sales in inventory o days 0 days X 11 Current Yr: 1 Yr Ago