Mastery Problem: Financial Statement Analysis Liquidity and Solvency Measures Your friend, another accountant, has bet you that with your knowledge of accounting and just the computations for comm statements. You take the bet! Match each computation to one of the liquidity and solvency measures in the table. (Hint: Begin by looking for simple com measures that use those amounts.) Liquidity and Solvency Measures Computations Working capital Current ratio Quick ratio Accounts receivable turnover Number of days' sales in receivables Inventory turnover Number of days' sales in inventory Ratio of fixed assets to long-term liabilities Ratio of liabilities to stockholders' equity Times interest earned $3,095,000 - $880,000 $3,095,000+ $880,000 $1,866,000+ $880,000 $8,250,000+ [($714,000+ $740,000) + 2] [($714,000+ $740,000) + 2] + ($8.250,000 + 365) $4,100,000+ [($1,072,000 +$1,100,000) + 2] [($1,072,000 +$1,100,000) + 2] + ($4,100,000+ 365) $2,690,000+ $1,690.000 $2,570,000+ $4,039,000 ($970.500 +$127,000) +$127,000 Balance Sheet Use the following balance sheet form to enter amounts you identify from the computations on the Liquidity and Solvency M Profitability Measures part. If you have a choice of two amounts, assume the first amount in the ratio is for the end of the Balance Sheet December 31, 20Y6 Current assets: Balance Sheet December 31, 2016 Assets Cash Marketable securities Accounts receivable (net) Inventory Prepaid expenses Total current assets Long-term investments Property, plant, and equipment (net) Total assets Liabilities Current liabilities Long-term liabilities Total liabilities Stockholders' Equity Preferred stock, $10 par Common stock, $5 par Retained earnings Total stockholders' equity $823,000 Total assets Liabilities Current liabilities Long-term liabilities Total liabilities Stockholders' Equity Preferred stock, $10 par Common stock, $5 par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity S Profitability Measures Match each computation to one of the profitability measures in the table. Profitability Measures Asset turnover Return on total assets Return on stockholders' equity Return on common stockholders' equity Earnings per share on common stock Price-earnings ratio Dividends per share Dividend yield Computations