9 Consider each of the following independent transactions. How will each of these transactions affect the ROE, Current Ratio, Debt/Equity ratio and Basic Earnings per Share (+, -, or NC)? 1. Purchase inventory on account. 2. 3. Sell inventory for cash at a profit. Repaid a long-term bank loan. Issued new shares of stock. 4. 5. Issued a 20% stock dividend.
9 Consider each of the following independent transactions. How will each of these transactions affect the ROE, Current Ratio, Debt/Equity ratio and Basic Earnings per Share (+, -, or NC)? 1. Purchase inventory on account. 2. 3. Sell inventory for cash at a profit. Repaid a long-term bank loan. Issued new shares of stock. 4. 5. Issued a 20% stock dividend.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 66P
Related questions
Question
![Accounting
Consider each of the following independent transactions. How will
each of these transactions affect the ROE, Current Ratio,
Debt/Equity ratio and Basic Earnings per Share (+, -, or NC)?
1.
Purchase inventory on account.
2.
3.
Sell inventory for cash at a profit.
Repaid a long-term bank loan.
Issued new shares of stock.
4.
5.
Issued a 20% stock dividend.
Beginning Ratios: ROE = .60; Current Ratio = 2.5; Debt/Equity = 6.0
ROE
Debt/Equity BEPS
Current
Ratio
1
2
3
4
5](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F908d21f0-f54a-4297-88f5-00da4f5ce527%2F6a39eabd-3fd0-4746-94e5-81ff5af52500%2Fbht8ro6q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Accounting
Consider each of the following independent transactions. How will
each of these transactions affect the ROE, Current Ratio,
Debt/Equity ratio and Basic Earnings per Share (+, -, or NC)?
1.
Purchase inventory on account.
2.
3.
Sell inventory for cash at a profit.
Repaid a long-term bank loan.
Issued new shares of stock.
4.
5.
Issued a 20% stock dividend.
Beginning Ratios: ROE = .60; Current Ratio = 2.5; Debt/Equity = 6.0
ROE
Debt/Equity BEPS
Current
Ratio
1
2
3
4
5
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