Six 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) $1,729,000 Liabilities: Current liabilities $182,000 Note payable, 6%, due in 15 years 910,000 Total liabilities $1,092,000 Stockholders' equity: Preferred $2 stock, $100 par (no change during year) $819,000 Common stock, $10 par (no change during year) 819,000 Retained earnings: Balance, beginning of year $874,000 Net income 388,000 $1,262,000 Preferred dividends $16,380 Common dividends 153,620 170,000 Balance, end of year 1,092,000 Total stockholders' equity $2,730,000 Sales $15,278,650 Interest expense $54,600 Assuming that total assets were $3,631,000 at the beginning of the current fiscal year, determine the following. When required, rou 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

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Six 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)
$1,729,000
Liabilities:
Current liabilities
$182,000
Note payable, 6%, due in 15 years
910,000
Total liabilities
$1,092,000
Stockholders' equity:
Preferred $2 stock, $100 par (no change during year)
$819,000
Common stock, $10 par (no change during year)
819,000
Retained earnings:
Balance, beginning of year
$874,000
Net income
388,000 $1,262,000
Preferred dividends
$16,380
Common dividends
153,620
170,000
Balance, end of year
1,092,000
Total stockholders' equity
$2,730,000
Sales
$15,278,650
Interest expense
$54,600
Assuming that total assets were $3,631,000 at the beginning of the current fiscal year, determine the following. When required, rou
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
Transcribed Image Text:Six 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) $1,729,000 Liabilities: Current liabilities $182,000 Note payable, 6%, due in 15 years 910,000 Total liabilities $1,092,000 Stockholders' equity: Preferred $2 stock, $100 par (no change during year) $819,000 Common stock, $10 par (no change during year) 819,000 Retained earnings: Balance, beginning of year $874,000 Net income 388,000 $1,262,000 Preferred dividends $16,380 Common dividends 153,620 170,000 Balance, end of year 1,092,000 Total stockholders' equity $2,730,000 Sales $15,278,650 Interest expense $54,600 Assuming that total assets were $3,631,000 at the beginning of the current fiscal year, determine the following. When required, rou 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
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