The following ratios and measures are available for Hubei Corporation:
Receivables turnover............10 times
Debt to total assets...................40%
Free cash flow....................$25,000
Profit margin.........................10%
Earnings per share.....................$2
Instructions
(a) Indicate whether each of the above would increase, decrease, or remainun changed by each of the following independent transactions:
1. Hubei issues common shares.
2. Hubei collects an account receivable.
3. Hubei issues a mortgage payable.
4. Hubei sells equipment at a loss.
5. Hubei's share price increases from $10 to $12.
(b) Would your answers to any of the above change if the profit margin were negative and the earnings per share were a loss per share?