a. Based on these data, calculate the following for 2008 and 2007:

1. Days' sales in receivables (use trade receivables)

2. Accounts receivable turnover (use gross trade receivables at year-end)

3. Days' sales in inventory

4. Inventory turnover (use year-end inventory)

5. Working capital

6. Current ratio

7. Acid-test ratio

b. Comment on each ratio individually.

c. Why are portions of long-term debt included in short-term borrowings?

d. Prepare a vertical common-size analysis for the balance sheets using 2008 and 2007 (use total assets as the base).

e. Comment on the vertical common-size analysis.

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EASTMAN KODAK COMPANY* CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended December 31 (In millions, except per share data) Net sales Cost of goods sold 2008 2007 2006 $10,301 7.757 2,544 1.778 549 543 (230) S10,568 $9416 7.247 2,169 1,583 Gross profit Selling, general, and administrative expenses Research and development costs Restructuring costs, rationalization, and other 501 140 (821) 2,446 1.969 596 416 476) Loss from continuing operations before interest expense, other income (charges), net and income taxes 108 Interest expense Other income (charges), net Loss from continuing operations before income taxes (Benefit) provision for income taxes Loss from continuing operations Earnings from discontinued operations, net of income taxes NET (LOSS) EARNINGS 172 65 (583) 221 S (804 (874) (147) 87 (256) (51) s (727) S 285 S (442) S 881 S 676 S (601)