eBook Question Content Area Six Measures of Solvency or Profitability The following data were taken from the financial statements of Loveseth Inc. for the current fiscal year. Property, plant, and equipment (net) $1,529,500 Liabilities: Current liabilities $161,000 Note payable, 6%, due in 15 years 805,000 Total liabilities $966,000 Stockholders' equity: Preferred $4 stock, $100 par (no change during year) $1,449,000 Common stock, $10 par (no change during year) 1,449,000 Retained earnings: Balance, beginning of year $1,546,000 Net income 479,000 $2,025,000 Preferred dividends $57,960 Common dividends 35,040 93,000 Balance, end of year 1,932,000 Total stockholders' equity $4,830,000 Sales $25,429,500 Interest expense $48,300 Assuming that total assets were $5,506,000 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 fill in the blank 6% Check My Work

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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Question Content Area

Six Measures of Solvency or Profitability

The following data were taken from the financial statements of Loveseth Inc. for the current fiscal year.

Property, plant, and equipment (net)				$1,529,500
Liabilities:
	Current liabilities		$161,000
	Note payable, 6%, due in 15 years		805,000
	Total liabilities				$966,000
Stockholders' equity:
	Preferred $4 stock, $100 par (no change during year)				$1,449,000
	Common stock, $10 par (no change during year)				1,449,000
Retained earnings:
	Balance, beginning of year	$1,546,000
	Net income	479,000	$2,025,000
	Preferred dividends	$57,960
	Common dividends	35,040	93,000
	Balance, end of year				1,932,000
Total stockholders' equity				$4,830,000
Sales				$25,429,500
Interest expense				$48,300

Assuming that total assets were $5,506,000 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	fill in the blank 6%