Six Measures of Solvency or Profitability The following data were taken from the financial statements of Loveseth Inc. for the current fiscal year. Property, plant, and equipment (net) $3,040,000 Liabilities: Current liabilities $1,200,000 Note payable, 6%, due in 15 years 1,600,000 Total liabilities $2,800,000 Stockholders’ equity: Preferred $10 stock, $100 par (no change during year) $800,000 Common stock, $10 par (no change during year) 1,600,000 Retained earnings: Balance, beginning of year $1,072,000 Net income 928,000 $2,000,000 Preferred dividends $80,000 Common dividends 320,000 400,000 Balance, end of year 1,600,000 Total stockholders’ equity $4,000,000 Sales $17,920,000 Interest expense $96,000 Assuming that total assets were $6,000,000 at the beginning of the current fiscal year, determine the following: Round your answers to one decimal place. a. Ratio of fixed assets to long-term liabilities fill in the blank 1 b. Ratio of liabilities to stockholders' equity fill in the blank 2 c. Asset turnover fill in the blank 3 d. Return on total assets fill in the blank 4% e. Return on stockholders’ equity fill in the blank 5% f. Return on common stockholders’ equity fill in the blank 6%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Six Measures of Solvency or Profitability

The following data were taken from the financial statements of Loveseth Inc. for the current fiscal year.

Property, plant, and equipment (net)				$3,040,000
Liabilities:
	Current liabilities		$1,200,000
	Note payable, 6%, due in 15 years		1,600,000
	Total liabilities				$2,800,000
Stockholders’ equity:
	Preferred $10 stock, $100 par (no change during year)				$800,000
	Common stock, $10 par (no change during year)				1,600,000
Retained earnings:
	Balance, beginning of year	$1,072,000
	Net income	928,000	$2,000,000
	Preferred dividends	$80,000
	Common dividends	320,000	400,000
	Balance, end of year				1,600,000
Total stockholders’ equity				$4,000,000
Sales				$17,920,000
Interest expense				$96,000

Assuming that total assets were $6,000,000 at the beginning of the current fiscal year, determine the following: Round your answers to one decimal place.

a. Ratio of fixed assets to long-term liabilities	fill in the blank 1
b. Ratio of liabilities to stockholders' equity	fill in the blank 2
c. Asset turnover	fill in the blank 3
d. Return on total assets	fill in the blank 4%
e. Return on stockholders’ equity	fill in the blank 5%
f. Return on common stockholders’ equity	fill in the blank 6%

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 7 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

how did you find the average common stockholders' equity for the final question?

Solution

by Bartleby Expert

SEE SOLUTION

Follow-up Question

Where did you get the 6 million in assets turnover problem?

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions