### Six Measures of Solvency or ProfitabilityThe following data were taken from the financial statements of Gates Inc. for the current fiscal year:#### Property, Plant, and Equipment (Net)- Total: $3,200,000#### Liabilities:- **Current liabilities**: $1,000,000- **Note payable, 6%, due in 15 years**: $2,000,000- **Total liabilities**: $3,000,000#### Stockholders' Equity:- **Preferred $10 stock, $100 par (no change during the year)**: $1,000,000- **Common stock, $10 par (no change during the year)**: $2,000,000#### Retained Earnings:- **Balance, beginning of the year**: $1,570,000- **Net income**: $930,000- **Preferred dividends**: $(100,000)- **Common dividends**: $(400,000)- **Balance, end of the year**: $2,000,000#### Total Stockholders' Equity:- **Total**: $5,000,000#### Sales:- **Total**: $18,900,000#### Interest Expense:- **Total**: $120,000Assuming that long-term investments totaled $3,000,000 throughout the year and that total assets were $7,000,000 at the beginning of the current fiscal year, determine the following. Round to one decimal place.1. **Ratio of fixed assets to long-term liabilities**2. **Ratio of liabilities to stockholders' equity**3. **Asset turnover**4. **Return on total assets**5. **Return on stockholders' equity**6. **Return on common stockholders' equity****Calculation Boxes (placeholders for user input):**a. Ratio of fixed assets to long-term liabilities: [________]b. Ratio of liabilities to stockholders' equity: [________]c. Asset turnover: [________]d. Return on total assets: [_____]%e. Return on stockholders' equity: [_____]%f. Return on common stockholders' equity: [_____]%---The content above presents a detailed set of financial information and ratios crucial for evaluating the solvency and profitability of a business. The provided data include specific figures on assets,

Asset turnover is also known as the ratio of total sales or revenue to average assets which…

Šix Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $3,200,000 Liabilities: Current liabilities $1,000,000 Note payable, 6%, due in 15 years 2,000,000 Total liabilities $3,000,000 Stockholders' equity: Preferred $10 stock, $100 par (no change during year) $1,000,000 Common stock, $10 par (no change during year) 2,000,000 Retained earnings: Balance, beginning of year $1,570,000 Net income 930,000 Preferred dividends (100,000) Common dividends (400,000) Balance, end of year 2,000,000 Total stockholders' equity $5,000,000 Sales $18,900,000 C130.00o

Šix Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $3,200,000 Liabilities: Current liabilities $1,000,000 Note payable, 6%, due in 15 years 2,000,000 Total liabilities $3,000,000 Stockholders' equity: Preferred $10 stock, $100 par (no change during year) $1,000,000 Common stock, $10 par (no change during year) 2,000,000 Retained earnings: Balance, beginning of year $1,570,000 Net income 930,000 Preferred dividends (100,000) Common dividends (400,000) Balance, end of year 2,000,000 Total stockholders' equity $5,000,000 Sales $18,900,000 C130.00o

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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