Use the following information for que stions 2 and 3: For its most recent year a company had Sales (all on credit) of $830,000 and Cost of Goods Sold $525,000. At the beginning of the year its Accounts Receivable was $80,000 and its Inventory $100,000. At the end of the year its Accounts Receivable was S86,000 and its Inventery $110,000. On average how many days of sales were in Inventory during the year? On average how many days of sales were in Accounts Receivable during the year? 20 marks) (B) Write True or False. 1. Debt-Equity Ratio is a measure of long-term solvency of a frm. 2 In Common Size Statements, each item is expressed as a percentage of some common tems (total) 3. Trend Percentage Analysis helps in Dynamic Analysis. 4. DU PONT Analysis looks into the elements of profits. 5. Ratio Analysis provides the solution to the financial problems. 6. A corporation's excellent reputation will be listed among the corporation's assets on its statement of financial position. (7. Earnings before interest and taxes is a measure of what the firm would have earned if it didr's have any obligations to creditors or tax authorities. ( 8. The current market value of a corporation is approximately the amount reported on the balance sheet os stockholders' equity. F9. Proceeds from a company's sale of stock to the public are included in par value and retained earnings, 10. To create a common size balance sheet divides all items on the statement of financial position by total assets. 11. Common size financial statements make it easier to compare firms of different sizes. T 12. Fixed asset turnover is considered a profitability measure. G 13. To measure a firm's solvency as completely as possible, we need to consider the firms leverage and ability to make interest payments on its long-term debt. 14. Net working capital is defined as: total assets minus total liabilities. 15. "Shareholder wealth" in a firm is represented by the market price per share of the firm's comm stock. 16. The market price of a share of common stock is determined by the stock exchange on which the is listed. 1. Credit policy of every company is largely influenced by liquidity and accountability. 3