There are five traditional financial indicators identified below:

Quick (Acid-test) ratio

Inventory turnover

Net margin

Debt/Equity

Earnings Per Share (EPS)

Assuming that each indicator is a ratio greater than one, record and explain the effect of each of the following transactions that would have effect on each of the five indicators. Respond with increase, decrease, or no effect in the matrix. Then, explain why there is an increase, decrease, or no effect.

Transactions:

1.Sold Inventory below its cost at a loss

2.Collected an account receivable from a customer

3.Sold common stock for cash to new stockholders

4.Sold marketable securities at a loss

5.Received cash in advance from a customer (not yet earned)