Comparative financial statement data of Hamden Optical Mart follow:

Other information:
1. Market price of Hamden common stock: $102.17 at December 31, 2012, and $77.01 at December 31, 2011
2. Common shares outstanding: 18,000 during 2012 and 17,500 during 2011
3. All sales on credit

Requirements
1. Compute the following ratios for 2012 and 2011:
a. Current ratio
b. Quick (acid-test) ratio
c. Receivables turnover and days sales outstanding (DSO) (round to the nearest whole day)
d. Inventory turnover and days inventory outstanding (DIO) (round to the nearest whole day)
e. Accounts payable turnover and days payable outstanding (DPO) (round to the nearest whole day)
f. Cash conversion cycle (in days)
g. Times-interest-earned ratio
h. Return on assets (use DuPont analysis)
i. Return on common stockholders€™ equity (use DuPont analysis)
j. Earnings per share of common stock
k. Price/earnings ratio
2. Decide whether (a) Hamden€™s financial position improved or deteriorated during 2012 and (b) the investment attractiveness of Hamden€™s common stock appears to have increased or decreased.
3. How will what you learned in this problem help you evaluate aninvestment?

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Hamden Optical Mart Comparative Income Statements Years Ended December 31, 2012 and 2011 2012 2011 Net sales Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income tax Income tax Net income $687,000$595,000 375,000 276,000 312,000319,000 129,000 142,000 183,000 177,000 45,000 146,000 132.000 1,000 $110,000 81,000 37,000 expense 36,000 Hamden Optical Mart Comparative Balance Sheets December 31, 2012 and 2011 2012 2011 2010* Current assets: Cash Current receivables, net Inventories Prepaid expenses 5 45,000 49,000 212,000 158,000 $200,000 297,000281,000 181,000 4,000 558,000 517,000 285,000277,000 843,000 $794,000 700,000 29,000 Total current assets Property, plant, and equipment, net Total assets Accounts payable Other current liabilities Total current liabilities Long-term liabilities Total liabilities Common stockholders' equity, no par Total liabilities and stockholders' equity 150,000105,000 112,000 135,000 188,000 S285,000 $293,000 243,000 231,000 528,000 524,000 315,000 270,000 199,000 $843,000 794,000