Question

Measures of liquidity, Solvency and Profitability

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall Inc. common stock was $ 66 on December 31, 20Y2.

Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
			20Y2		20Y1
Retained earnings, January 1			$ 1,413,000		$ 1,202,700
Net income			330,000		246,300
Total			$ 1,671,000		$ 1,449,000
Dividends
	On preferred stock		$ 10,500		$ 10,500
	On common stock		25,500		25,500
		Total dividends	$ 36,000		$ 36,000
Retained earnings, December 31			$ 1,707,000		$ 1,413,000

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2		20Y1
Sales	$ 2,222,850		$ 2,047,980
Cost of goods sold	740,950		681,670
Gross profit	$ 1,481,900		$ 1,366,310
Selling expenses	$ 525,770		$ 642,850
Administrative expenses	447,880		377,540
Total operating expenses	973,650		1,020,390
Income from operations	$ 508,250		$ 345,920
Other income	26,750		22,080
	$ 535,000		$ 368,000
Other expense (interest)	160,000		88,000
Income before income tax	$ 375,000		$ 280,000
Income tax expense	45,000		33,700
Net income	$ 330,000		$ 246,300

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
			Dec. 31, 20Y2		Dec. 31, 20Y1
Assets
Current assets
	Cash		$ 370,270		$ 319,370
	Marketable securities		560,410		529,250
	Accounts receivable (net)		394,200		372,300
	Inventories		292,000		219,000
	Prepaid expenses		70,050		63,870
		Total current assets	$ 1,686,930		$ 1,503,790
Long-term investments			841,770		4,001
Property, plant, and equipment (net)			2,400,000		2,160,000
Total assets			$ 4,928,700		$ 3,667,791
Liabilities
Current liabilities			$ 581,700		$ 514,791
Long-term liabilities
	Mortgage note payable, 8 %		$ 900,000		$ 0
	Bonds payable, 8 %		1,100,000		1,100,000
		Total long-term liabilities	$ 2,000,000		$ 1,100,000
Total liabilities			$ 2,581,700		$ 1,614,791
Stockholders' Equity
Preferred $ 0.70 stock, $ 20 par			$ 300,000		$ 300,000
Common stock, $ 10 par			340,000		340,000
Retained earnings			1,707,000		1,413,000
	Total stockholders' equity		$ 2,347,000		$ 2,053,000
Total liabilities and stockholders' equity			$ 4,928,700		$ 3,667,791

1. Working capital	$
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables		days
6. Inventory turnover
7. Number of days' sales in inventory		days
8. Ratio of fixed assets to long-term liabilities
9. Ratio of liabilities to stockholders' equity
10. Times interest earned
11. Asset turnover
12. Return on total assets		%
13. Return on stockholders’ equity		%
14. Return on common stockholders’ equity		%
15. Earnings per share on common stock	$
16. Price-earnings ratio
17. Dividends per share of common stock	$
18. Dividend yield

Answer 1