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Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was s 67 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $3,595,450 $3,035,750 Net income 851,200 621,800 Dividends: On preferred stock On common stock (10,500) (10,500) (51,600) (51,600) Retained earnings, December 31 $4,384,550 $3,595,450 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $4,847,930 $4,466,640 Cost of merchandise sold 1,594,320 1,466,770 Gross profit $3,253,610 $2,999,870 Selling expenses $1,112,980 $1,377,430 Administrative expenses 948,100 808,960 Total operating expenses $2,061,08O $2,186,390 Income from operations $1,192,530 $813,480 Other revenue and expense: Other revenue 62,770 51,920 Other expense (interest) (288,000) (158,400) Income before income tax expense $967,300 $707.000 Income tax expense 116,100 85,200 Net income S851,200 $621,800 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $726,520 $966,540 Marketable securities 1,099,590 1,601,690 Accounts receivable (net) 861,400 810,300 Inventories 642,400 496,400 Prepaid expenses 137,446 193,310 Total current assets $3,467,356 $4,068,240

Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was s 67 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $3,595,450 $3,035,750 Net income 851,200 621,800 Dividends: On preferred stock On common stock (10,500) (10,500) (51,600) (51,600) Retained earnings, December 31 $4,384,550 $3,595,450 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $4,847,930 $4,466,640 Cost of merchandise sold 1,594,320 1,466,770 Gross profit $3,253,610 $2,999,870 Selling expenses $1,112,980 $1,377,430 Administrative expenses 948,100 808,960 Total operating expenses $2,061,08O $2,186,390 Income from operations $1,192,530 $813,480 Other revenue and expense: Other revenue 62,770 51,920 Other expense (interest) (288,000) (158,400) Income before income tax expense $967,300 $707.000 Income tax expense 116,100 85,200 Net income S851,200 $621,800 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $726,520 $966,540 Marketable securities 1,099,590 1,601,690 Accounts receivable (net) 861,400 810,300 Inventories 642,400 496,400 Prepaid expenses 137,446 193,310 Total current assets $3,467,356 $4,068,240

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PB
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Long-term investments 3,002,834 1,966,297 Property, plant, and equipment (net) 4,320,000 3,888,000 Total assets $10,790,190 $9,922,537 Liabilities Current liabilities $1,195,640 $2,737,087 Long-term liabilities: Mortgage note payable, 8% $1,620,000 $0 Bonds payable, 8% 1,980,000 1,980,000 Total long-term liabilities $3,600,000 $1,980,000 Total liabilities $4,795,640 $4,717,087 Stockholders' Equity | Preferred $0.70 stock, $50 par $750,000 $750,000 Common stock, $10 par 860,000 860,000 Retained earnings 4,384,550 3,595,450 Total stockholders' equity $5,994,550 $5,205,450 Total liabilities and stockholders' equity $10,790,190 $9,922,537 Required: Determine the following measures for 20Y2, 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 2,271,716 2. Current ratio 2.9 3. Quick ratio 2.2 4. Accounts receivable turnover 5.8 5. Number of days' sales in receivables 6. Inventory turnover 7. Number of days' sales in inventory 62.9 days 2.8 130.35 days 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders' equity 10. Times interest earned 11. Asset turnover 12. Return on total assets % 13. Return on stockholders' equity 14. Return on common stockholders' equity % 15. Earnings per share on common stock 16. Price-earnings ratio 17. Dividends per share of common stock 18. Dividend yield %
Transcribed Image Text:Long-term investments 3,002,834 1,966,297 Property, plant, and equipment (net) 4,320,000 3,888,000 Total assets $10,790,190 $9,922,537 Liabilities Current liabilities $1,195,640 $2,737,087 Long-term liabilities: Mortgage note payable, 8% $1,620,000 $0 Bonds payable, 8% 1,980,000 1,980,000 Total long-term liabilities $3,600,000 $1,980,000 Total liabilities $4,795,640 $4,717,087 Stockholders' Equity | Preferred $0.70 stock, $50 par $750,000 $750,000 Common stock, $10 par 860,000 860,000 Retained earnings 4,384,550 3,595,450 Total stockholders' equity $5,994,550 $5,205,450 Total liabilities and stockholders' equity $10,790,190 $9,922,537 Required: Determine the following measures for 20Y2, 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 2,271,716 2. Current ratio 2.9 3. Quick ratio 2.2 4. Accounts receivable turnover 5.8 5. Number of days' sales in receivables 6. Inventory turnover 7. Number of days' sales in inventory 62.9 days 2.8 130.35 days 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders' equity 10. Times interest earned 11. Asset turnover 12. Return on total assets % 13. Return on stockholders' equity 14. Return on common stockholders' equity % 15. Earnings per share on common stock 16. Price-earnings ratio 17. Dividends per share of common stock 18. Dividend yield %
Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 67 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Retained earnings, January 1 $3,595,450 $3,035,750 Net income 851,200 621,800 Dividends: On preferred stock On common stock (10,500) (10,500) (51,600) (51,600) Retained earnings, December 31 $4,384,550 $3,595,450 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Y1 Sales $4,847,930 $4,466,640 Cost of merchandise sold 1,594,320 1,466,770 Gross profit $3,253,610 $2,999,870 Selling expenses $1,112,980 $1,377,430 Administrative expenses 948,100 808,960 Total operating expenses $2,061,080 $2,186,390 Income from operations $1,192,530 $813,480 Other revenue and expense: Other revenue 62,770 51,920 Other expense (interest) (288,000) (158,400) Income before income tax expense $967,300 $707,000 Income tax expense 116,100 85,200 Net income $851,200 $621,800 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $726,520 $966,540 Marketable securities 1,099,590 1,601,690 Accounts receivable (net) 861,400 810,300 Inventories 642,400 496,400 Prepaid expenses 137,446 193,310 Total current assets $3,467,356 $4,068,240
Transcribed Image Text:Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 67 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Υ1 Retained earnings, January 1 $3,595,450 $3,035,750 Net income 851,200 621,800 Dividends: On preferred stock On common stock (10,500) (10,500) (51,600) (51,600) Retained earnings, December 31 $4,384,550 $3,595,450 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Υ2 20Y1 Sales $4,847,930 $4,466,640 Cost of merchandise sold 1,594,320 1,466,770 Gross profit $3,253,610 $2,999,870 Selling expenses $1,112,980 $1,377,430 Administrative expenses 948,100 808,960 Total operating expenses $2,061,080 $2,186,390 Income from operations $1,192,530 $813,480 Other revenue and expense: Other revenue 62,770 51,920 Other expense (interest) (288,000) (158,400) Income before income tax expense $967,300 $707,000 Income tax expense 116,100 85,200 Net income $851,200 $621,800 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $726,520 $966,540 Marketable securities 1,099,590 1,601,690 Accounts receivable (net) 861,400 810,300 Inventories 642,400 496,400 Prepaid expenses 137,446 193,310 Total current assets $3,467,356 $4,068,240
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