a. Ratio of fixed assets to long-term liabilities fill in the blank 1 b. Ratio of liabilities to stockholders' equity fill in the blank 2 c. Asset turnover fill in the blank 3
a. Ratio of fixed assets to long-term liabilities fill in the blank 1 b. Ratio of liabilities to stockholders' equity fill in the blank 2 c. Asset turnover fill in the blank 3
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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) | $1,361,800 | |||||
Liabilities: | ||||||
Current liabilities | $125,000 | |||||
Note payable, 6%, due in 15 years | 619,000 | |||||
Total liabilities | $744,000 | |||||
$446,400 | ||||||
Common stock, $10 par (no change during year) | 446,400 | |||||
Balance, beginning of year | $476,000 | |||||
Net income | 204,000 | $680,000 | ||||
Preferred dividends | $17,856 | |||||
Common dividends | 66,944 | 84,800 | ||||
Balance, end of year | 595,200 | |||||
Total stockholders' equity | $1,488,000 | |||||
Sales | $6,678,000 | |||||
Interest expense | $37,140 |
Assuming that long-term investments totaled $1,116,000 throughout the year and that total assets were $2,120,000 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 | fill in the blank 1 |
b. Ratio of liabilities to stockholders' equity | fill in the blank 2 |
c. Asset turnover | fill in the blank 3 |
d. Return on total assets | fill in the blank 4 % |
e. Return on stockholders’ equity | fill in the blank 5 % |
f. Return on common stockholders' equity |
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