Assuming that total assets were $4,120,000 at the beginning of the current fiscal year, determine the following: When required, round to onedecimal place.a. Ratio of fixed assets to long-term liabilitiesb. Ratio of liabilities to stockholders' equityc. Asset turnoverd. Return on total assets%e. Return on stockholders' equity%f. Return on common stockholders' equity% Six Measures of Solvency or ProfitabilityThe following data were taken from the financial statements of Loveseth Inc. for the current fiscal year.Property, plant, and equipment (net)$1,239,600Liabilities:Current liabilities$206,000Note payable, 6%, due in 15 years1,033,000Total liabilities$1,239,000Stockholders' equity:Preferred $4 stock, $100 par (no change during year)$929,250Common stock, $10 par (no change during year)929,250Retained earnings:Balance, beginning of year$992,000Net income396,000 $1,388,000Preferred dividends$37,170Common dividends111,830149,000Balance, end of year1,239,000Total stockholders' equity$3,097,500Sales$28,329,275Interest expense$61,980

Accounting Ratios are defined as the metrics group which is used for evaluating the profitability as well as efficiency of the company grounded on the financial reports or financial statement. The ratio is the way of expressing the relationship among the data. Note: Answering first three subparts as there multiple subparts, kindly submit a new question. a. Computing the fixed assets to long term liabilities ratio as: Fixed Assets to Long Term Liabilities = Fixed assetsLong term liabilities=$1,239,600$1,033,000=1.2 b. Computing the liabilities to stockholders' equity ratio as: Liabilities to Stockholders’ Equity = Total liabilitiesTotal shareholders' equity=$1,239,000$3,097,500=0.4c. Computing asset turnover ratio as: Asset turnover ratio =SalesAverage total assets Where Total assets, Beginning $4,120,000 Total assets, Ending is computed as: Total assets = Total liabilities + Total stockholders' equity=$1,239,000 + $3,097,500=$4,336,500 Computing average total assets as: Average total assets = Beginning total assets + Ending total assets2=$4,120,000 + $4,336,5002=$4,228,250 Putting the values above in the formula as: Asset turnover = $28,329,275$4,228,250=6.7

Business

Accounting

Assuming that total assets were $4,120,000 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 b. Ratio of liabilities to stockholders' equity C. Asset turnover

Assuming that total assets were $4,120,000 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 b. Ratio of liabilities to stockholders' equity C. Asset turnover

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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