Effect of transactions on various financial ratios Indicate the effect that each transaction/event listed here will have on the financial ratio listed opposite it, and provide an explanation for your answer. Use + for increase, - for decrease, and (NE) for no effect. Assume that current assets exceed current liabilities in all cases, both before and after the transaction/event.
| Transaction/Event | Financial Ratio |
a. | Split the common stock 2 for 1. | Book value per share of common stock |
b. | Collected accounts receivable. | Number of days’ sales in accounts receivable |
c. | Issued common stock for cash. | Total asset turnover |
d. | Sold treasury stock. | Return on equity |
e. | Accrued interest on a note receivable. | Current ratio |
f. | Sold inventory on account. | Acid-test ratio |
g. | Wrote off an uncollectible account. | Accounts receivable turnover |
h. | Declared a cash dividend. | Dividend yield |
i. | Incurred operating expenses. | Margin |
i | Sold equipment at a loss. | Earnings per share |
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