(Effect of transactions and economic events on ratios, LO 4, 5, 6, 7, 8,9) The president of Ruskin Inc. (Ruskin) wants to know the effect that a number of transactions and economic events will have on several financial measures for the company’s fiscal year ended April 30, 2006. Complete the following table by indicating whether the listed transactions or economic events would increase, decrease or have no effect on the financial measures listed. Explain your reasoning and state any assumptions that you make.

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Ratio/amount before taking the transaction/economic event into effect. a. Ruskin signed a contract to purchase raw materials beginning in 2007 at an agreed-to price. b. Ruskin provided services to a customer that were paid for in the previous fiscal year. c. Ruskin made a contribution to its defined-contribution pension plan. d. A fire destroyed a small building owned by Ruskin on May 4, 2006. e. Ruskin had a decrease in its future income taxes. f. Ruskin arranged a new operating lease. g. Ruskin paid $1,000,000 to settle a lawsuit that was launched three years ago. Debt-to- equity ratio Current ratio Interest coverage ratio Cash from operations Return on assets 0.8:1 0.95 5.21 $2,250,000 7.1%