Mastery Problem: Financial Statement Analysis Liquidity and Selvency Measures Your friend, another accountant, has bet you that with your knowledge of accounting and jnt the computations for common analytical measures, you can figure out many aspects of a company's financial statements You take the Match each computation to one of the squity and vency measures in the table (Hint: Begin by looking for simple computations and identifying the amounts in those computations. Look for other measures that use those amounts) Liquidity and Solvency Measures Working capital Current rate Quick ra Accounts receivable to Number of days in receivebies Inventory turnover Number of day sales in inventory Rate of feed sets to long-term abilities Rate of labies to stockholders equity Times reamed 33.992.000-1060.000 33271000+3850,000 31.866,000 $840,000 Computations 20.200.000 (714,000-$740,000) 21- $714,000-$749,009) 21 ($8.200,000 - 365) 34,100,000 1,073.000 11.100,000) 21 - (1.072.000 11.100.099)-21XCX 11.490.000 - $1.450.000 12.310.000 15.052.000 ($999,400 $127,000) $127,000 - gance sheet form to enter amounts you identity from the computations on the Liquidity and Solvency Measures part. You will identify ether amounts for the balance sheet on the Proficity Measures part have if two amounts me the first amount in the ratis i the end of the year Compute any missing amounts Balance Sheet December 31, 2018 Asset Current assets Ce $23,000 Marketable s Aunts receivable (n) 714,000 1,072,000 Prepaid penses tal current UNES Balance Sheet Use the following belance sheet form to enter amounts you identity from the computations on the Liquidity and Solvency Measures part. You will identify other amounts for the balance sheet on the Peshtarity Measur you have a choice of twe amounts, assume the first amount in the ratio is for the end of the year. Compute any missing amounts Current Cash Balance Sheet December 31, 2016 Assets Marketable securibes 1823,000 94746 Accounts receivable() 714,000 Inventory 1,073,000 Prepaid expenses talent Long-term investments Property, plant, and equipment) Total Cuent Liabilities Long-term tables Stockholders' Equity Preferred ck, $10 par Common stock, ins utal stoodidery Tood labitties and stockholders evity 2,690,000 800,000 1,490,000 2.550,000 4,057,000 Match each computation one of the instability measures in the table All work MacBook Air Imal minese Submit Assigment for Grading Katch cei compulation one of the profitabatte mesures in the table Profitability Measures Asset turnover Return an fatal assets etum en stacholders equity Retum an common stockholders' equity Demings per share on common stock Pricing Dividends per share Dividend yield Comparative Income Statement 18,200,000 Computations ($5,783,000+ $5.593.009121 (5001,420 - $127,099)+(5,607,000+15,417,000) 21 3001.420 (64.037.000 + $3.854.1501-21- 15001420-153,000) + ($3,599,500+ $3.425,729131 (889140141,000) 150,000 shares 3.35-$3.05 $175,000 250,000 shares 10.70-535- the the fullwing comparative income statement form to enter amounts you identify from the camputations on the Liquidity and Solvency Measures part and on the Profitabdity Measures part. Compute any miseng amounts complete the analysis culum Enter percentages as decimal amounts, rounded to one decimal place. When rounding, lock only at the figure to the night of one decimal place. If 5, mund down and it a 5, round For example, for 32 048% enter 32.0% For 32.050% enter 32.1% Comparative Income Statement For the Years Ended December 31, 2016 and 2015 Increase/(Decrease) 2016 8,200,000 2015 $7,207,000 Amount Percentage $93,000 13.4 Cet of goods w 4.100,000 (3,444,000) 650,000 19 4,180,000 $3.843,000 337,000 1,821,800 1,457,000) 344,000 25 Aviarative expens 1,242,000) 106,000) 134,000 12.3 3,043,400 3,563,600) 500,000 10.8 " Crying m 1,116,400 1770 143,000 Other expense Ontar 127,000 (120,400) Income befestas pen 995,400 169,400 6,400 12.7 % 3.3 14.4 " 187,900 (L) 0,000 33 " 801,430 6975,820 175,400 Comparative Income Statement Use the following comparative income statement farm to enter amounts you identify from the computations on the Liquidity and Selvency Measures part and on the Profitability Heasures part. Compute any missing complete the horiental my columns Enter percentages as decimal amounts, rounded to one decimal place. When munding, look only at the figure to the right of one decimal place 15, round down and For example, for 32.04% enter 32.0% For 32.058% enter 32.1% Comparative Income Statement For the Years Ended December 31, 2016 and 2015 Increase/(Decrease) 2016 Sales 8,300,000 20YS $7,387,000 Amount Percentage $93,000 13.4 S Cast of goods sold 4,100,000 (3,444,000) 656,000 19 N Gr prof 4,180,000 $3,043,000 337,000 Sengexpo 1,821,000 SELAS7,600) 344,000 25 % Administrative expenses (1.342,000) (1.106,000) 136,000 333 " 3,043,600 10,543,400) " 500,000 18% Operating 1.110,400 $1,279,400 163,000 13.7 Other expense (ar) 127,000 120,400) 8,400 Income before inc 501,400 $1.358800 169,400 14.0 % Income tax expense 187,000 (181,980) 6,000 33 801,430 5576820 175,400 Final Questions Your accountant end reveals that the company whose informat you have been working on is actually a company he is thinking of investing in what advice and insight do you have for your friend Ling sery the information from your hartsantat analysis of the comparative income statement, complete the following sentences has devased significantly from 2015 to 201, even thigh addition, has inovates Howeve Chas increased at a later rete. The company appears Based on these vans, do you recommend that your friend invest in this company's stock which owed the mos and round o