Question

Nineteen Measures of Solvency and Profitability

The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $59 on December 31, 2016.

Blige Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 2016 and 2015
			2016		2015
Retained earnings, January 1			$3,875,800		$3,256,400
Add net income for year			876,000		667,000
Total			$4,751,800		$3,923,400
Deduct dividends
	On preferred stock		$11,200		$11,200
	On common stock		36,400		36,400
		Total	$47,600		$47,600
Retained earnings, December 31			$4,704,200		$3,875,800

Blige Inc.
Comparative Income Statement
For the Years Ended December 31, 2016 and 2015
	2016		2015
Sales	$5,054,850		$4,650,500
Sales returns and allowances	25,150		16,350
Sales	$5,029,700		$4,634,150
Cost of goods sold	2,014,070		1,852,940
Gross profit	$3,015,630		$2,781,210
Selling expenses	$937,180		$1,188,630
Administrative expenses	798,330		698,080
Total operating expenses	1,735,510		1,886,710
Income from operations	$1,280,120		$894,500
Other income	67,380		57,100
	$1,347,500		$951,600
Other expense (interest)	352,000		193,600
Income before income tax	$995,500		$758,000
Income tax expense	119,500		91,000
Net income	$876,000		$667,000

Blige Inc.
Comparative Balance Sheet
December 31, 2016 and 2015
			Dec. 31, 2016		Dec. 31, 2015
Assets
Current assets
	Cash		$942,540		$905,050
	Temporary investments		1,426,550		1,499,790
	Accounts receivable (net)		978,200		919,800
	Inventories		730,000		569,400
	Prepaid expenses		178,328		181,010
		Total current assets	$4,255,618		$4,075,050
Long-term investments			2,211,362		716,096
Property, plant, and equipment (net)			5,720,000		5,148,000
Total assets			$12,186,980		$9,939,146
Liabilities
Current liabilities			$1,372,780		$1,933,346
Long-term liabilities
	Mortgage note payable, 8%, due 2021		$1,980,000		$0
	Bonds payable, 8%, due 2017		2,420,000		2,420,000
		Total long-term liabilities	$4,400,000		$2,420,000
Total liabilities			$5,772,780		$4,353,346
Stockholders' Equity
Preferred $0.7 stock, $50 par			$800,000		$800,000
Common stock, $10 par			910,000		910,000
Retained earnings			4,704,200		3,875,800
	Total stockholders' equity		$6,414,200		$5,585,800
Total liabilities and stockholders' equity			$12,186,980		$9,939,146

Required:

Determine the following measures for 2016, 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. Number of times interest charges are earned
11. Number of times preferred dividends are earned
12. Ratio of sales to assets
13. Rate earned on total assets		%
14. Rate earned on stockholders' equity		%
15. Rate earned on common stockholders' equity		%
16. Earnings per share on common stock	$
17. Price-earnings ratio
18. Dividends per share of common stock	$
19. Dividend yield		%

Answer 1