Response to the following questions:
1. Which of the following is an extraordinary item?
(a) a settlement paid to a customer injured while using the company's product,
(b) a loss to a plant from damages caused by a meteorite, or
(c) a loss from selling old equipment.
2. Why is a company's capital structure, as measured by debt and equity ratios, important to financial statement analysts?
3. How does inventory turnover provide information about a company's short-term liquidity?