1. Nineteen Measures of The ability of a firm to pay its debts asthey come due.Solvency and The ability of a firm to earnincome.Profitability

   The comparative financial statements of Blige Inc. are asfollows. The market price of Blige Inc. common stock was $61 onDecember 31, 2016.

   Blige Inc.
   Comparative Retained EarningsStatement
   For the Years Ended December 31, 2016 and2015
   			2016		2015
   Retained earnings, January 1			$1,943,600		$1,645,700
   Add net income for year			432,000		337,100
   Total			$2,375,600		$1,982,800
   Deduct dividends
   	On preferred stock		$7,000		$7,000
   	On common stock		32,200		32,200
   		Total	$39,200		$39,200
   Retained earnings, December 31			$2,336,400		$1,943,600

   Blige Inc.
   Comparative Income Statement
   For the Years Ended December 31, 2016 and2015
   	2016		2015
   Sales	$2,575,110		$2,369,100
   Sales returns and allowances	12,810		8,330
   Sales	$2,562,300		$2,360,770
   Cost of goods sold	995,720		916,060
   Gross profit	$1,566,580		$1,444,710
   Selling expenses	$503,840		$626,030
   Administrative expenses	429,190		367,670
   Total operating expenses	933,030		993,700
   Income from operations	$633,550		$451,010
   Other income	33,350		28,790
   	$666,900		$479,800
   Other expense (interest)	176,000		96,800
   Income before income tax	$490,900		$383,000
   Income tax expense	58,900		45,900
   Net income	$432,000		$337,100

   Blige Inc.
   Comparative Balance Sheet
   December 31, 2016 and 2015
   			Dec. 31,2016		Dec. 31,2015
   Assets
   Current assets
   	Cash		$535,350		$428,450
   	Temporary investments		810,260		709,990
   	Accounts receivable (net)		489,100		459,900
   	Inventories		365,000		277,400
   	Prepaid expenses		101,274		85,690
   		Total current assets	$2,300,984		$1,961,430
   Long-term investments			912,176		248,553
   Property, plant, and equipment (net)			2,860,000		2,574,000
   Total assets			$6,073,160		$4,783,983
   Liabilities
   Current liabilities			$676,760		$770,383
   Long-term liabilities
   	Mortgage note payable, 8%, due 2021		$990,000		$0
   	Bonds payable, 8%, due 2017		1,210,000		1,210,000
   		Total long-term liabilities	$2,200,000		$1,210,000
   Total liabilities			$2,876,760		$1,980,383
   Stockholders' Equity
   Preferred $0.7 stock, $40 par			$400,000		$400,000
   Common stock, $10 par			460,000		460,000
   Retained earnings			2,336,400		1,943,600
   	Total stockholders' equity		$3,196,400		$2,803,600
   Total liabilities and stockholders' equity			$6,073,160		$4,783,983

   Required:

   Determine the following measures for 2016, rounding to onedecimal place, except for dollar amounts, which should be roundedto the nearest cent. Use the rounded answer of the requirement forsubsequent requirement, if required. Assume 365 days a year.

   5. The relationship between sales and accountsreceivable, computed by dividing the average accounts receivable bythe average daily sales.Number of days' sales in receivables		days
   6. The relationship between the volume ofgoods sold and inventory, computed by dividing the cost of goodssold by the average inventory.Inventory turnover
   7. The relationship between the volume ofsales and inventory, computed by dividing average inventory by theaverage daily cost of goods sold.Number of days' sales ininventory		days
   8. The ratio of fixed assets to long-termliabilities provides a measure of whether note-holders orbondholders will be paid.Ratio of fixed assets to long-termliabilities
   9. The ratio of liabilities to stockholders'equity measures how much of the company is financed by debt andequity.Ratio of liabilities to stockholders' equity
   10. A ratio that measures creditor margin ofsafety for interest payments, calculated as income before incometax + interest expense divided by interest expense.Number of timesinterest charges are earned
   11. A ratio that measures the risk thatpreferred dividends will not be paid if earnings decrease,calculated by dividing net income by the amount of preferreddividends.Number of times preferred dividends are earned
   12. Ratio that measures how effectively acompany uses its assets, computed as sales divided by average totalassets.Ratio of sales to assets
   13. A measure of profitability of assets,without regard to the portion of assets financed by creditors orstockholders.Rate earned on total assets		%
   14. A measure of profitability computed bydividing net income by average stockholders' equity.Rate earned onstockholders' equity		%
   15. A measure of profitability computed bydividing net income, reduced by preferred dividend requirements, byaverage common stockholders' equity.Rate earned on commonstockholders' equity		%
   16. The profitability ratio of net incomeavailable to common shareholders to the number of common sharesoutstanding.Earnings per share on common stock	$
   17. The ratio of the market price per share ofcommon stock, at a specific date, to the annual earnings pershare.Price-earnings ratio
   18. Measures the extent to which earnings arebeing distributed to common shareholders.Dividends per share ofcommon stock	$
   19. A ratio, computed by dividing the annualdividends paid per share of common stock by the market price pershare at a specific date, that indicates the rate of return tostockholders in terms of cash dividend distributions.Dividendyield