Q1) There are five traditional financial indicators recognized below for Lipscomb Inc. Suppose that each indicator is a ratio greater than one. By using a matrix with 5 columns for indicators and 10 rows for transactions, record effect each of following transactions of Lipscomb would have on each indicator. Respond with increase, decrease, no effect by using symbols: +, < >, 0 respectively.
Quick (Acid-test) Ratio
Accounts Receivable Turnover
Earnings per Share
Debt/Assets
Dividend Payout Rate
Transactions:
1. Purchased inventory on account
2. Sold inventory below its cost at a loss
3. Collected an account receivable from a customer
4. Issued bonds for cash from long-term creditors
5. Sold common stock for cash to new stockholders
6. Sold marketable securities at a loss
7. Declared a dividend on common stock
8. Sold land for cash at a gain
9. Received cash in advance from a customer (not yet earned)
10. Purchased common stock for the treasury