Indicate the effect that each transaction/event listed here will have on the financial ratio listed opposite it,
Question:
Indicate the effect that each transaction/event listed here will have on the financial ratio listed opposite it, and provide an explanation for your answer. Use + for increase, − for decrease, and (NE) for no effect. Assume that current assets exceed current liabilities in all cases, both before and after the transaction/event.
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Transaction/Event Financial Ratio a. Split the common stock 2 for 1. Book value per share of common stock b. Collected accounts receivable. Number of days' sales in accounts receivable c. Issued common stock for cash. Total asset turnover d. Sold treasury stock. Return on equity Current ratio e. Accrued interest on a note receivable. f. Sold inventory on account. g. Wrote off an uncollectible account. h. Declared a cash dividend. i. Incurred operating expenses. j. Sold equipment at a loss. Acid-test ratio Accounts receivable turnover Dividend yield Margin Earnings per share
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