708 Chapter 16: Financial Statement Analysis L03 RATIO CASH FLOW 1a: 2014 Current ratio: 1.9 times le:2014 Inventory turnover: 3.6 times 2c 2014 Return on assets: 8.4% 3b: 2014 Return on equity: 18.4% 4d: 2014 Free cash flows ($280,000) Sb:2014 Dividend yield: 3.1% Comprehensive Ratio Analysis P9. Data for Obras Corporation in 2014 and 2013 follow. These data should be used in conjunction with the data in P1. Net capital expenditures 2014 2013 Net cash flows from operating activities $(196,000) $144,000 $40,000 $65,000 Dividends paid $44,000 $34,400 Number of common shares 40,000 40,000 $36 $60 Market price per share Selected balances at the end of 2012 were accounts receivable (net), $206,800; inven tory, $547,200; total assets, $1,465,600; accounts payable, $386,600; and stockhold- ers' equity, $641,200. All of Obras'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 to one decimal place.) 1. Prepare a operating asset management analysis by calculating for each year the (a) current ratio, (b) quick ratio, (c) receivables turnover, (d) days' sales uncol lected, (e) inventory turnover, (f) days' inventory on hand, (g) payables turnover, (h) days' payable, and (i) financing period. 2. Prepare a profitability and total asset management analysis by calculating for each year the (a) profit margin, (b) asset turnover, and (c) return on assets. 3. Prepare a financial risk analysis by calculating for each year the (a) debt to equity ratio, (b) return on equity, and (e) interest coverage ratio. 4. Prepare a liquidity 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) dividend yield. 6. ACCOUNTING CONNECTION After making the calculations, indicate whether each ratio improved or deteriorated from 2013 to 2014 (use F for favorable and U for unfavorable and consider changes of 0.1 or less to be neutral)