Question

Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 62 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 $ 1,419,250 $ 1,203,650 Net income 312,400 246,500 Total $1,731,650 $ 1,450,150 Dividends: On preferred stock $ 10,500 $ 10,500 On common stock 20,400 20,400 Total dividends $ 30,900 $ 30,900 Retained earnings, December 31 $ 1,700,750 $ 1,419,250 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $ 1,916,615 $ 1,765,870 Cost of goods sold 678,900 624,590 Gross profit $ 1,237,715 $ 1,141,280 Selling expenses $ 428,800 $ 516,710 Administrative expenses 365,265 303,470 Total operating expenses $794,065 $820,180 Income from operations $ 443,650 $ 321,100 Other revenue 23,350 20,500 $ 467,000 $ 341,600 Other expense (interest) 112,000 61,600 Income before income tax $ 355,000 $ 280,000 Income tax expense 42,600 33,500 Net income $ 312,400 $ 246,500 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $ 343,480 $ 296,990 Marketable securities 519,860 492,150 Accounts receivable (net) 335,800 313,900 Inventories 248,200 189,800 Prepaid expenses 64,980 59,400 Total current assets $ 1,512,320 $ 1,352,240 Long-term investments 881,030 307,914 Property, plant, and equipment (net) 1,820,000 1,638,000 Total assets $ 4,213,350 $ 3,298,154 Liabilities Current liabilities $ 472,600 $ 468,904 Long-term liabilities: Mortgage note payable, 8% $ 630,000 $ 0 Bonds payable, 8% 770,000 770,000 Total long-term liabilities $ 1,400,000 $ 770,000 Total liabilities $ 1,872,600 $ 1,238,904 Stockholders' Equity Preferred $0.70 stock, $20 par $ 300,000 $ 300,000 Common stock, $10 par 340,000 340,000 Retained earnings 1,700,750 1,419,250 Total stockholders' equity $ 2,340,750 $ 2,059,250 Total liabilities and stockholders' equity $ 4,213,350 $ 3,298,154 Required: Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year. 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