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Impact of transactions on ratios Analyse the effect of each of the following transactions on the current ratio, quick ratio, debt-to-equity ratio and earnings per
Impact of transactions on ratios Analyse the effect of each of the following transactions on the current ratio, quick ratio, debt-to-equity ratio and earnings per share. Assume that the current ratio, quick ratio and debt-to-equity ratio are each greater than 1, and that earnings per share is positive. Determine if each ratio increases, decreases or is unchanged. Consider each transaction independently of all the other transactions. 1 Repaid short-term loans payable of $51000. 2 Purchased inventory of $48000 on cash. 3 Made repayments of $78000 on the long-term loan. 4 Declared, but did not pay, a $31000 cash dividend on shares. 5 Borrowed an additional $56000 on the long-term loan. 6 Sold short-term investments recorded in the balance sheet at $30000 for $28000. 7 Issued 140000 shares at the beginning of the financial period for cash of $168000. 8 Received $6000 owing in cash from a customer
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