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Mastery Problem: Financial Statement Analysis Liquidity and Solvency Measures Your friend, another accountant, has bet you that with your knowledge of accounting and just the computations for common analytical measures; you can figure out many aspects of a company's financlar statements, You take the bet! Match each computation to one of the babidity and solvency measures in the table. (Hint: Begin by looking for simple computations and identifying the amounts in those computations, Look for other measures that use those amounts.) Use the following balance sheet form to enter amounts you identify from the computations on the Lquidity and 5 olvency Measures part. You will identify other amounts for the balance sheet on the Profitability Measures part. If you have a choice of two amounts, assume the first amount in the ratio is for the end of the year. Compute an missing amounts: Liabilities Current liabilities Long-term liabilities Total liabilities Stockholders' Equity Preferred stock, $10 par Common stock, $5 par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity \$ Profitability Measures Match each computation to one of the profitability measures in the table. Comparative Income Statement Use the following comparotive income staternent form to enter amounts you identify from the computations on the Louidity and Solvency Measures part and on the Prontability Measures part. Compute any missing amounts and complete the horizontal analysis columns. Enter percentages as decimal amounts, rounded to one decimal place. When rounding, look only at the figure to the right of one decimal place. 11

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