Five Measures of Solvency or ProfitabilityThe balance sheet for Quigg Inc. at the end of the current fiscal year indicated the following:Bonds payable, 10%$1,800,000Preferred $10 stock, $100 par273,000Common stock, $8 par709,800Income before income tax expense was $450,000,and income taxes were $67,800 for the current year. Cash dividends paid on common stock during the current year totaled $62,107. The common stock was selling for $28 pershare at the end of the year.Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, ifrequired.a. Times interest earned ratio3.5timesb. Earnings per share on common stock2$4.40Xc. Price-earnings ratio2.8Xd. Dividends per share of common stock$1.14Dividend yield4 х %е.FeedbackV Check My Worka. Divide the sum of income before income tax plus interest expense by interest expense. Interest equals the bond payable amount times the interest rate on the bonds.b. Divide net income (which is income before taxes less income taxes) minus preferred dividends by common shares outstanding (common stock ÷ par value).c. Dividemarket share price (or selling price at the end of the year) byearnings per share (from requirement c).d. Divide common dividends by common shares outstanding (common stock ÷ par value).e. Divide common dividends per share (from requirement e) by share price (or selling price at the end of the year).

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Five Measures of Solvency or Profitability The balance sheet for Quigg Inc. at the end of the current fiscal year indicated the following: Bonds payable, 10% $1,800,000 Preferred $10 stock, $100 par 273,000 Common stock, $8 par 709,800 Income before income tax expense was $450,000,and income taxes were $67,800 for the current year. Cash dividends paid on common stock during the current year totaled $62,107. The common stock was selling for $28 pe share at the end of the year. Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, required. a. Times interest earned ratio 3.5 v times b. Earnings per share on common stock 4.40 x c. Price-earnings ratio 2.8 x

Five Measures of Solvency or Profitability The balance sheet for Quigg Inc. at the end of the current fiscal year indicated the following: Bonds payable, 10% $1,800,000 Preferred $10 stock, $100 par 273,000 Common stock, $8 par 709,800 Income before income tax expense was $450,000,and income taxes were $67,800 for the current year. Cash dividends paid on common stock during the current year totaled $62,107. The common stock was selling for $28 pe share at the end of the year. Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, required. a. Times interest earned ratio 3.5 v times b. Earnings per share on common stock 4.40 x c. Price-earnings ratio 2.8 x

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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Measures of liquidity, solvency, and profitabilityThe comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2. InstructionsDetermine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts):1. Working capital2. Current ratio3. Quick ratio4. Accounts receivable turnover5. Number of days' sales in receivables6. Inventory turnover7. Number of days' sales in inventory8. Ratio of fixed assets to long-term liabilities9. Ratio of liabilities to stockholders' equity10. Times interest earned11. Asset turnover12. Return on total assets13. Return on stockholders' equity14. Return on common stockholders' equity15. Earnings per share on common stock16. Price-earnings ratio17. Dividends per share of common stock18. Dividend yield
Markus Company’s common stock sold for $1.75 per share at the end of this year. The company paid a common stock dividend of $0.42 per share this year. It also provided the following data excerpts from this year’s financial statements: Ending Balance Beginning Balance Cash $ 27,000 $ 43,800 Accounts receivable $ 48,000 $ 41,300 Inventory $ 45,100 $ 48,000 Current assets $ 120,100 $ 133,100 Total assets $ 312,000 $ 263,800 Current liabilities $ 49,500 $ 34,500 Total liabilities $ 82,000 $ 73,800 Common stock, $1 par value $ 105,000 $ 105,000 Total stockholders’ equity $ 230,000 $ 190,000 Total liabilities and stockholders’ equity $ 312,000 $ 263,800 This Year Sales (all on account) $ 580,000 Cost of goods sold $ 336,400 Gross margin $ 243,600 Net operating income $ 49,500 Interest expense $ 3,000 Net income $ 32,550 7. What are the working capital and current ratio at the end of this year?
Return on Equity Evans & Sons, Inc., disclosed the following information in a recent annual report: Net Income Average stockholders' equity Dividend per common share Earnings per share Market price per common share, year-end Net income Previous Year Current Year $94,500 $129,600 1,000,000 1,500,000 Previous Year $ Current Year $ 5.13 7.70 51.30 Calculate the return on equity for Evans & Sons for each year. Did the return improve? Numerator 5.40 8.64 56.70 Denominator ◆ Average stockholders' equity X 8 x Did the return improve? The return on common stockholders' equity decreased X X from the previous year to the current year. ROE % %
Five Measures of Solvency or Profitability The balance sheet for Bearing Industries Inc. at the end of the current fiscal year indicated the following: Bonds payable, 7% $1,400,000 320,000 Preferred $5 stock, $100 par Common stock, $12 par 600,000 Income before income tax was $254,800, and income taxes were $38,800, for the current year. Cash dividends paid on common stock during the current year totaled $30,000. The common stock was selling for $40 per share at the end of the year. Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, if required. a. Times interest earned ratio b. Earnings per share on common stock c. Price-earnings ratio d. Dividends per share of common stock e. Dividend yield $ $ times %
the income statement for Stretch-Tape Corporation reports net sales of $439,900 and net income of $54,780. Average total assets for the year are $830,000. Stockholders’ equity at the beginning of the year was $530,000, and $23,000 was paid to stockholders as dividends during the year. There were no other stockholders’ equity transactions that occurred during the year.Required:Calculate the return on assets, profit margin, asset turnover, and return on equity ratios. (Round your answers to 1 decimal place.) Profitability Ratios Return on assets 6.6 % Profit margin 12.5 % Asset turnover times Return on equity %
WD Corporation reports the following year-end balance sheet data. The company's debt-to-equity ratio equals: Cash $ 42,000 Current liabilities $ 77,000 Accounts receivable 57,000 Long-term liabilities 28,000 Inventory 62,000 Common stock 102,000 Equipment 147,000 Retained earnings 101,000 Total assets $ 308,000 Total liabilities and equity $ 308,000
Lydex Company’s financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 1,020,000 $ 1,260,000 Marketable securities 0 300,000 Accounts receivable, net 2,940,000 2,040,000 Inventory 3,660,000 2,100,000 Prepaid expenses 270,000 210,000 Total current assets 7,890,000 5,910,000 Plant and equipment, net 9,640,000 9,110,000 Total assets $ 17,530,000 $ 15,020,000 Liabilities and Stockholders' Equity Liabilities: Current liabilities $ 4,070,000 $ 3,100,000 Note payable, 10% 3,700,000 3,100,000 Total liabilities 7,770,000 6,200,000 Stockholders' equity: Common stock, $75 par value 7,500,000 7,500,000 Retained earnings 2,260,000 1,320,000 Total stockholders' equity 9,760,000 8,820,000 Total liabilities and stockholders' equity $ 17,530,000 $ 15,020,000 Lydex Company Comparative Income Statement and Reconciliation This…
Earnings per Share, Price-Earnings Ratio, Dividend Yield The following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year: Common stock, $25 par value (no change during the year) $6,750,000 Preferred $4 stock, $200 par (no change during the year) 8,000,000 The net income was $862,000 and the declared dividends on the common stock were $67,500 for the current year. The market price of the common stock is $22.10 per share. For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield. If required, round your answers to two decimal places. a. Earnings per Share b. Price-Earnings Ratio c. Dividends per Share d. Dividend Yield %
Earnings per Share, Price-Earnings Ratio, Dividend Yield The following information was taken from the financial statements of Zeil Inc. for December 31 of the current fiscal year: Common stock, $20 par (no change during the year) $8,000,000 Preferred $3 stock, $50 par (no change during the year) 1,500,000 The net income was $2,010,000, and the declared dividends on the common stock were $1,728,000 for the current year. The market price of the common stock is $72 per share. For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield. Round answers to one decimal place, except for dollar amounts which should be rounded to two decimal places. a. Earnings per Share $fill in the blank 1 b. Price-Earnings Ratio fill in the blank 2 c. Dividends per Share $fill in the blank 3 d. Dividend Yield fill in the blank 4 %
Rakesh
Financial statement data for the current year for Hanz Corp. are as follows: Line Item Description Amount Net income $5,700,000 Preferred dividends $70,000 Average number of common shares outstanding 200,000 The earnings per share for the current year are? a.$28.15 b.$28.50 c.$28.85 d.$0.35