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 $ 31,624 $ 36,965 $ 37,373 89,400 62,300 51,000 110,500 84,000 56,000 10,184 9,703 4,153 283,774 260,034 221,574 $525.482 $453,002 $370,100 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $133,462 $ 78,088 $ 49,830 100,766 106,274 83,428 162,500 162,500 162,500 128,754 106,140 74,342 $525,482 $453,002 $370,100 The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit: 2017 2016 $683,127 $539,072 $416,707 $350,397 For Year Ended December 31 Sales Cost of goods sold Other operating expenses Interest expense Income taxes Total costs and expenses 211,769 136,385 11,613 12,399 8,881 8,086 648,970 507,267 Net income $ 34,157 $ 31,805 Earnings per share $ 2.10 $ 1.96 (1) Compute days' sales uncollected. Days' Sales Uncollected Choose Numerator: 1 Choose Denominator: Days = Days' Sales Uncollected 2017: Days' Sales Uncollected days days 2016: x = (2) Compute accounts receivable turnover. Accounts Receivable Turnover 1 Choose Denominator: Choose Numerator: = Accounts Receivable Turnover 1 = Accounts receivable turnover 2017: times 2016: times (3) Compute inventory turnover. Inventory Turnover | Choose Denominator: Choose Numerator: 1 = Inventory Turnover Inventory turnover times 2017: 1 = 2016: 1 times (4) Compute days' sales in inventory. Days' Sales In Inventory Choose Denominator: Choose Numerator: Days Days' Sales In Inventory / X = 2017: 2016: Days' sales in inventory days days