Comparative financial statement data of Robinson Optical Mart follow:

Other information:
1. Market price of Robinson common stock: $88.17 at December 31, 2014, and $77.01 at December 31, 2013
2. Common shares outstanding: 18,000 during 2014 and 17,800 during 2013
3. All sales on credit

1. Compute the following ratios for 2014 and 2013:
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) (use cost of goods sold in the numerator of the turnover ratio and round DPO 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) Robinson’s financial position improved or deteriorated during 2014 and
(b) The investment attractiveness of Robinson’s common stock appears to have increased or decreased.
3. How will what you learned in this problem help you evaluate aninvestment?

  • CreatedJuly 25, 2014
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