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 $3,095,000 - $880,000 V Current ratio $3,095,000 + $880,000 Quick ratio $1,866,000+ $880,000 Accounts receivable turnover $8,250,000+ F($714,000+ $740,000) + 2] Number of days' sales in receivables [($714,000 + $740,000) + 2] + ($8,250,000 + 365) Inventory turnover $4,100,000+ [($1,072,000+ $1,100,000) + 2) [($1,072,000+ $1,100,000) + 2) + ($4,100,000 + 365) Number of days' sales in inventory $2,690,000 $1,690,000 Ratio of fixed assets to long-term liabilities Ratio of liabilities to stockholders' equity $2,570,000 $4,039,000 V Times Interest earned (5970,500 + $127.000) 5127.000 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 $823,000 329,000 714,000 Accounts receivable (net) Inventory 1,072,000 / Prepaid expenses 153,000 X Total current assets Long-term investments 24,000 / G Property, plant, and equipment (net) 2,690,000 Total assets 1,866,000 X Liabilities Current liabilities 840,000 X Long-term liabilities 1,690,000 Total liabilities Stockholders' Equity Preferred stock, $10 par Common stock, $5 par Retained earnings 1,713,240 X Total stockholders' equity 4,075,000 X Total liabilities and stockholders' equity 6,605,000 X Feedback