Financial statement data of Backroad Travel magazine include the following information (dollars in thousands):
Cash ......................................................................................................... $ 25,000
Accounts receivable, net ......................................................................... $ 83,500
Inventories ............................................................................................... $169,500
Total assets .............................................................................................. $680,000
Short-term notes payable ....................................................................... $ 51,500
Accounts payable .................................................................................... $105,000
Accrued liabilities .................................................................................... $ 43,500
Long-term liabilities ................................................................................. $208,000
Net income .............................................................................................. $ 74,520
Common shares outstanding .................................................................. 46,000
Requirements
1. Compute Backroad Travel's current ratio, debt ratio, and earnings per share. Round all ratios to two decimal places.
2. Compute the three ratios after evaluating the effect of each transaction that follows.
Consider each transaction separately.
a. Purchased inventory on account, $60,000
b. Borrowed $170,000 on a long-term note payable
c. Issued 5,750 shares of common stock, receiving cash of $136,000
d. Received cash on account, $22,000