Question
There are five traditional financial indicators identified below for Rainy Inc. Assume that each indicator other than gross margin is a ratio greater than
There are five traditional financial indicators identified below for Rainy Inc. Assume that each indicator other than gross margin is a ratio greater than one. Complete the matrix with 5 columns for the indicators and 5 rows for the transactions, record the effect each of the following transactions of Rainy would have on each indicator. Respondwith increase, decrease, no effect using the symbols: + Quick (Acid-test) Ratio Inventory Turnover Net Margin Interest Coverage TIE Earnings Per Share EPS Transactions: 1. Sold inventory at a loss on account. 2. Sold treasury common stock. 3. Issued bonds for cash to new creditors 4. Sold marketable securities at a gain 0. 5. Received cash in advance from a customer (not yet earned) Quick INV TO Net Margin TIE EPS 1. 2. 3. 4. 3 4 5
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