Analysis of Financial Statements

question 59

Essay

Analysis of Financial Statements.The market value of Farmington Corp.'s common shares was quoted at $54 per share at December 31, 2015, and 2014. Planetarium 's balance sheet at December 31, 2015, and 2014, and statement of income and retained earnings for the years then ended are presented below:
InstructionsBased on the above information, compute the following (for the year 2015 only): (Show supporting computations in good form.)
(a) Current ratio.
(b) Acid-test (quick) ratio.
(c) Receivables turnover.(d) Inventory turnover.(e) Book value per share of common stock.(f) Earnings per share on common stock.(g) Price-earnings ratio on common stock.(h) Payout ratio on common stock.

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Definitions:

Operants

Behaviors that are controlled or modified by their consequences, a concept central to operant conditioning in behavioral psychology.

Negative Reinforcement

A behavioral psychology principle where the removal of an unfavorable outcome or stimulus strengthens a desired behavior.

Pleasant Event

An enjoyable or satisfying occurrence that can have a positive effect on one’s emotional or mental state.

Classical Conditioning

A learning process in which a neutral stimulus becomes associated with a meaningful stimulus and acquires the capacity to elicit a similar response.