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 common analytical measures, you can figure out many aspects of a company's financial statements. You take the beti Match each computation to one of the liquidity and solvency 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 Computations Working capital $3,091,000 - $850,000 Current ratio $3,091,000+ $860,000 Quick ratio $1,366,000 5800,000 Accounts receivable turnover $3,270,000+ (5714,000 + 5740,000) 21 Number of days sales in receivables I(5714,000+ $740,000).2](58.270,000 4 365) Inventory turnover 34,100,000+ (51.072.000 $1,100,000) 21 Number of days sales in inventory (51,072,000 1.100.000). 21 (51,100,000 365) Ratio of fixed assets to long-term liabilities $2,600,000 $1.600,000 Ratio of liabilities to stockholders Equity 52.550.000-50055.000 (S083100 51.000) S127.000 Balance Sheet Use the following balance sheet form to enter amounts you Identify from the computations on the liquidity and Solvency Measures part. You will identify other amounts for the balance sheet on the Profitability Measures part. If you have a choice of two amounts, assume the first amount in the ratio is for the end of the year. Compute any missing amounts. Balance Sheet December 31, 2016 Assets Current assets: Cash Marketable securities $823.000 329,000 Accounts receivable (net) 714,000 Inventory 1,072,000 Prepaid expenses 157,000 X Total current assets Long-term investments Property, plant, and equipment (net) Total assets 5 Liabilities Current liabilities 840,000 x Liabilities Current liabilities 840,000 x Long-term liabilities 1,690,000 Total liabilities 2,530,000 X Stockholders' Equity Preferred stock, $10 par Common stock. $5 par Retained earnings Total stockholders equity Total liabilities and stockholders' equity Identify the amounts in the Liquidity and Solvency Me panel and the Profily Matures anel that are balance sheets and enter them accordingly Profitability Measures Match each computation to one of the profitability measures in the table Profitability Measures Computations Match each computation to one of the profitability measures in the table. Profitability Measures Computations Asset turnover $8,270,000+ [($5.781,000+ $5,591,000) 2] Return on total assets (5796,380 + $127,000) + [(56,605,000 + $6,415,000) + 2] Return on stockholders' equity $796,300 ($4,055,000 $3,052,250) 2] Return on common stockholders' equity (5796,380 - $65,000) [($3,567,500 $3,424,800) + 2] Earnings per share on common stock (5796,380 - $65,000) 250,000 shares Price-earnings ratio $35 $3.05 Dividends per share $175,000 + 250,000 shares Dividend yield 50.70+ 535