Data for Sanborn Corporation in 20x8 and 20x7 follow. These data should be used in conjunction with the data in P1.

Selected balances at the end of 20x6 were accounts receivable (net), $206,800; inventory, $547,200; total assets, $1,465,600; accounts payable, $386,600; and stockholders’ equity, $641,200. All Sanborn’s notes payable were current liabilities; all its bonds payable were long-term liabilities.
Required
Perform a comprehensive ratio analysis following the steps outlined below.
Round all answers to one decimal place.
1. Prepare a liquidity analysis by calculating for each year the (a) current ratio, (b) quick ratio, (c) receivable turnover, (d) days’ sales uncollected, (e) inventory turnover, (f) days’ inventory on hand, (g) payables turnover, and (h) days’ payable.
2. Prepare a profitability analysis by calculating for each year the (a) profit margin, (b) asset turnover, (c) return on assets, and (d) return on equity.
3. Prepare a long-term solvency analysis by calculating for each year the (a) debt to equity ratio and (b) interest coverage ratio.
4. Prepare a cash flow adequacy analysis by calculating for each year the (a) cash flow yield, (b) cash flows to sales, (c) cash flows to assets, and (d) free cash flow.
5. Prepare a market strength analysis by calculating for each year the (a) price/earnings (P/E) ratio and (b) dividends yield.
6. Manager Insight: After making the calculations, indicate whether each ratio improved or deteriorated from 20x7 to 20x8 (use F for favorable and U for unfavorable and consider changes of .1 or less to beneutral).

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20x8 20x7 Net cash flows from operating activities Net capital expenditures Dividends paid Number of common shares Market price per share $144,000 565,000 $34,400 40,000,000 40,000,000 $30 ($196,000) $40,000 $44,000 $18