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Exercise 13-8 Liquidity analysis and interpretation LO P3 The following information applies to the questions displayed below. Simon Company's year-end balance sheets follow 201 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured 2016 2015 $ 31,800 35, 625 37,800 89,500 62,500 50,200 112, 500 82,500 54, 000 5,000 278,500 255,000 230,500 $523, 000 445,000 377,500 10,700 9,375 $129,900 75,250 51,250 by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 98,500 101,500 83, 500 163,500 163,500 163, 500 131,100 104,750 79,250 523,000 $445,000 $377,500 The company's income statements for the years ended December 31, 2017 and 2016, follow. Assume that all sales are on credit: For Year Ended December 31 Sales Cost of goods sold Other operating expen3es Interest expense Income taxes Total costs and expen3es Net income 2017 2016 $673,500 $532,000 $411,225 209,550 12,100 9,525 $345,500 134,980 13,300 B,845 642,400 31,100 $ 1.90 502, 625 $ 29,375 $ 1.80 Earnings per share Exercise 13-8 Part 4 (4) Compute days' sales in inventory Choose Numerator Choose Denominator x Days Days' Sales In Inventory 1i Days' sales in inventory 2017 days days 2016

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