Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 63 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 $1,022,050 $862,950 Net income 233,600 176,800 Total $1,255,650 $1,039,750 Dividends: On preferred stock $7,700 $7,700 On common stock 10,000 10,000 Total dividends $17,700 $17,700 Retained earnings, December 31 $1,237,950 $1,022,050 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $1,470,220 $1,354,620 Cost of goods sold 571,590 525,860 Gross profit $898,630 $828,760 Selling expenses $291,610 $366,610 Administrative expenses 248,400 215,310 Total operating expenses $540,010 $581,920 Income from operations $358,620 $246,840 Other revenue 18,880 15,760 $377,500 $262,600 Other expense (interest) 112,000 61,600 Income before income tax $265,500 $201,000 Income tax expense 31,900 24,200 Net income $233,600 $176,800 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $345,040 $199,520 Marketable securities 522,220 330,630 Accounts receivable (net) 284,700 270,100 Inventories 219,000 175,200 Prepaid expenses 65,275 39,900 Total current assets $1,436,235 $1,015,350 Long-term investments 610,460 75,113 Property, plant, and equipment (net) 1,540,000 1,386,000 Total assets $3,586,695 $2,476,463 Liabilities Current liabilities $478,745 $214,413 Long-term liabilities: Mortgage note payable, 8% $630,000 $0 Bonds payable, 8% 770,000 770,000 Total long-term liabilities $1,400,000 $770,000 Total liabilities $1,878,745 $984,413 Stockholders' Equity Preferred $0.70 stock, $20 par $220,000 $220,000 Common stock, $10 par 250,000 250,000 Retained earnings 1,237,950 1,022,050 Total stockholders' equity $1,707,950 $1,492,050 Total liabilities and stockholders' equity $3,586,695 $2,476,463 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. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables days 6. Inventory turnover 7. Number of days' sales in inventory 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 $ 63 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 $1,022,050 $862,950 Net income 233,600 176,800 Total $1,255,650 $1,039,750 Dividends: On preferred stock $7,700 $7,700 On common stock 10,000 10,000 Total dividends $17,700 $17,700 Retained earnings, December 31 $1,237,950 $1,022,050 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $1,470,220 $1,354,620 Cost of goods sold 571,590 525,860 Gross profit $898,630 $828,760 Selling expenses $291,610 $366,610 Administrative expenses 248,400 215,310 Total operating expenses $540,010 $581,920 Income from operations $358,620 $246,840 Other revenue 18,880 15,760 $377,500 $262,600 Other expense (interest) 112,000 61,600 Income before income tax $265,500 $201,000 Income tax expense 31,900 24,200 Net income $233,600 $176,800 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $345,040 $199,520 Marketable securities 522,220 330,630 Accounts receivable (net) 284,700 270,100 Inventories 219,000 175,200 Prepaid expenses 65,275 39,900 Total current assets $1,436,235 $1,015,350 Long-term investments 610,460 75,113 Property, plant, and equipment (net) 1,540,000 1,386,000 Total assets $3,586,695 $2,476,463 Liabilities Current liabilities $478,745 $214,413 Long-term liabilities: Mortgage note payable, 8% $630,000 $0 Bonds payable, 8% 770,000 770,000 Total long-term liabilities $1,400,000 $770,000 Total liabilities $1,878,745 $984,413 Stockholders' Equity Preferred $0.70 stock, $20 par $220,000 $220,000 Common stock, $10 par 250,000 250,000 Retained earnings 1,237,950 1,022,050 Total stockholders' equity $1,707,950 $1,492,050 Total liabilities and stockholders' equity $3,586,695 $2,476,463 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. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables days 6. Inventory turnover 7. Number of days' sales in inventory 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 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Measures of liquidity, Solvency, and Profitability
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 63 on December 31, 20Y2.
Marshall Inc. | ||||||
Comparative |
||||||
For the Years Ended December 31, 20Y2 and 20Y1 | ||||||
20Y2 | 20Y1 | |||||
Retained earnings, January 1 | $1,022,050 | $862,950 | ||||
Net income | 233,600 | 176,800 | ||||
Total | $1,255,650 | $1,039,750 | ||||
Dividends: | ||||||
On |
$7,700 | $7,700 | ||||
On common stock | 10,000 | 10,000 | ||||
Total dividends | $17,700 | $17,700 | ||||
Retained earnings, December 31 | $1,237,950 | $1,022,050 |
Marshall Inc. | ||||
Comparative Income Statement | ||||
For the Years Ended December 31, 20Y2 and 20Y1 | ||||
20Y2 | 20Y1 | |||
Sales | $1,470,220 | $1,354,620 | ||
Cost of goods sold | 571,590 | 525,860 | ||
Gross profit | $898,630 | $828,760 | ||
Selling expenses | $291,610 | $366,610 | ||
Administrative expenses | 248,400 | 215,310 | ||
Total operating expenses | $540,010 | $581,920 | ||
Income from operations | $358,620 | $246,840 | ||
Other revenue | 18,880 | 15,760 | ||
$377,500 | $262,600 | |||
Other expense (interest) | 112,000 | 61,600 | ||
Income before income tax | $265,500 | $201,000 | ||
Income tax expense | 31,900 | 24,200 | ||
Net income | $233,600 | $176,800 |
Marshall Inc. | ||||||
Comparative Balance Sheet | ||||||
December 31, 20Y2 and 20Y1 | ||||||
20Y2 | 20Y1 | |||||
Assets | ||||||
Current assets | ||||||
Cash | $345,040 | $199,520 | ||||
Marketable securities | 522,220 | 330,630 | ||||
284,700 | 270,100 | |||||
Inventories | 219,000 | 175,200 | ||||
Prepaid expenses | 65,275 | 39,900 | ||||
Total current assets | $1,436,235 | $1,015,350 | ||||
Long-term investments | 610,460 | 75,113 | ||||
Property, plant, and equipment (net) | 1,540,000 | 1,386,000 | ||||
Total assets | $3,586,695 | $2,476,463 | ||||
Liabilities | ||||||
Current liabilities | $478,745 | $214,413 | ||||
Long-term liabilities: | ||||||
Mortgage note payable, 8% | $630,000 | $0 | ||||
Bonds payable, 8% | 770,000 | 770,000 | ||||
Total long-term liabilities | $1,400,000 | $770,000 | ||||
Total liabilities | $1,878,745 | $984,413 | ||||
Preferred $0.70 stock, $20 par | $220,000 | $220,000 | ||||
Common stock, $10 par | 250,000 | 250,000 | ||||
Retained earnings | 1,237,950 | 1,022,050 | ||||
Total stockholders' equity | $1,707,950 | $1,492,050 | ||||
Total liabilities and stockholders' equity | $3,586,695 | $2,476,463 |
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. |
$ | |
2. |
||
3. Quick ratio | ||
4. Accounts receivable turnover | ||
5. Number of days' sales in receivables | days | |
6. Inventory turnover | ||
7. Number of days' sales in inventory | 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 | % |
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