In: Accounting
Six Measures of Solvency or Profitability
The following data were taken from the financial statements of Gates Inc. for the current fiscal year.
Property, plant, and equipment (net) | $1,687,400 | |||||
Liabilities: | ||||||
Current liabilities | $154,000 | |||||
Note payable, 6%, due in 15 years | 767,000 | |||||
Total liabilities | $921,000 | |||||
Stockholders' equity: | ||||||
Preferred $4 stock, $100 par (no change during year) | $690,750 | |||||
Common stock, $10 par (no change during year) | 690,750 | |||||
Retained earnings: | ||||||
Balance, beginning of year | $736,000 | |||||
Net income | 251,000 | $987,000 | ||||
Preferred dividends | $27,630 | |||||
Common dividends | 38,370 | 66,000 | ||||
Balance, end of year | 921,000 | |||||
Total stockholders' equity | $2,302,500 | |||||
Sales | $14,142,375 | |||||
Interest expense | $46,020 |
Assuming that total assets were $3,062,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place.
a. Ratio of fixed assets to long-term liabilities | |
b. Ratio of liabilities to stockholders' equity | |
c. Asset turnover | |
d. Return on total assets | % |
e. Return on stockholders’ equity | % |
f. Return on common stockholders' equity | % |