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 $ 59 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			$ 2,053,050		$ 1,727,050
Net income			441,600		353,700
Total			$ 2,494,650		$ 2,080,750
Dividends
	On preferred stock		$ 7,700		$ 7,700
	On common stock		20,000		20,000
		Total dividends	$ 27,700		$ 27,700
Retained earnings, December 31			$ 2,466,950		$ 2,053,050

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2		20Y1
Sales	$ 2,719,980		$ 2,506,060
Cost of goods sold	1,051,200		967,100
Gross profit	$ 1,668,780		$ 1,538,960
Selling expenses	$ 549,330		$ 671,320
Administrative expenses	467,940		394,260
Total operating expenses	1,017,270		1,065,580
Income from operations	$ 651,510		$ 473,380
Other income	34,290		30,220
	$ 685,800		$ 503,600
Other expense (interest)	184,000		101,600
Income before income tax	$ 501,800		$ 402,000
Income tax expense	60,200		48,300
Net income	$ 441,600		$ 353,700

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
			Dec. 31, 20Y2		Dec. 31, 20Y1
Assets
Current assets
	Cash		$ 512,920		$ 381,510
	Marketable securities		776,310		632,230
	Accounts receivable (net)		518,300		489,100
	Inventories		394,200		306,600
	Prepaid expenses		97,035		76,300
		Total current assets	$ 2,298,765		$ 1,885,740
Long-term investments			1,644,440		436,621
Property, plant, and equipment (net)			2,530,000		2,277,000
Total assets			$ 6,473,205		$ 4,599,361
Liabilities
Current liabilities			$ 766,255		$ 336,311
Long-term liabilities
	Mortgage note payable, 8 %		$ 1,030,000		$ 0
	Bonds payable, 8 %		1,270,000		1,270,000
		Total long-term liabilities	$ 2,300,000		$ 1,270,000
Total liabilities			$ 3,066,255		$ 1,606,311
Stockholders' Equity
Preferred $ 0.70 stock, $ 40 par			$ 440,000		$ 440,000
Common stock, $ 10 par			500,000		500,000
Retained earnings			2,466,950		2,053,050
	Total stockholders' equity		$ 3,406,950		$ 2,993,050
Total liabilities and stockholders' equity			$ 6,473,205		$ 4,599,361

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