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Indicate the effect that each transaction/event listed here will have on the financial ratio listed opposite it, and provide an explanation for your answer. Use
Indicate the effect that each transaction/event listed here will have on the financial ratio listed opposite it, and provide an explanation for your answer. 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 Financial Ratio a. Purchased inventory on account. Number of days sales in inventory b. Sold inventory for cash, at a profit. Inventory turnover c. Issued a 10% stock dividend. . Earnings per share d. Issued common stock for cash. .. Debt ratio e. Sold land at a gain. . Return on investment f. Purchased treasury stock for cash. . Debt/equity ratio g. Accrued interest on a note payable. ..... Times interest earned h. Accrued wages that have been earned by employees. . Current ratio i. Purchased equipment for cash. Plant and equipment turnover j. Issued bonds at an interest rate that is less than the companys ROI. Return on equity
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