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brownhound22Lv1
31 Mar 2020
Measures of liquidity, solvency, and profitability
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 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
$3,704,000
$3,264,000
Net income
$ 600,000
$ 550,000
Dividends:
On preferred stock
(10,000)
(10,000)
On common stock
(100,000)
(100,000)
Increase in retained earnings
$ 490,000
$ 440,000
Retained earnings, December 31
$4,194,000
$3,704,000
Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
20Y2
20Y1
Sales
$ 10,850,000
$10,000,000
Cost of goods sold
(6,000,000)
(5,450,000)
Gross profit
$ 4,850,000
$ 4,550,000
Selling expenses
$ (2,170,000)
$ (2,000,000)
Administrative expenses
(1,627,500)
(1,500,000)
Total operating expenses
$(3,797,500)
$ (3,500,000)
Operating income
$ 1,052,500
$ 1,050,000
Other revenue and expense:
Other revenue
99,500
20,000
Other expense (interest)
(132,000)
(120,000)
Income before income tax expense
$ 1,020,000
$ 950,000
Income tax expense
(420,000)
(400,000)
Net income
$ 600,000
$ 550,000
Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
20Y2
20Y1
Assets
Current assets:
Cash
$1,050,000
$ 950,000
Marketable securities
301,000
420,000
Accounts receivable (net)
585,000
500,000
Inventories
420,000
380,000
Prepaid expenses
108,000
20,000
Total current assets
$ 2,464,000
$2,270,000
Long-term investments
800,000
800,000
Property, plant, and equipment (net)
5,760,000
5,184,000
Total assets
$ 9,024,000
$8,254,000
Liabilities
Current liabilities
$ 880,000
$ 800,000
Long-term liabilities:
Mortgage note payable, 6%
$ 200,000
$ 0
Bonds payable, 4%
3,000,000
3,000,000
Total long-term liabilities
$ 3,200,000
$3,000,000
Total liabilities
$ 4,080,000
$3,800,000
Stockholders’ Equity
Preferred 4% stock, $5 par
$ 250,000
$ 250,000
Common stock, $5 par
500,000
500,000
Retained earnings
4,194,000
3,704,000
Total stockholders’ equity
$ 4,944,000
$4,454,000
Total liabilities and stockholders’ equity
$ 9,024,000
$8,254,000
Determine the following measures for 20Y2. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent.
1. Working Capital
$
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days’ sales in receivables
6. Inventory turnover
7. Number of days’ sales in inventory
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 $82.60 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 | $3,704,000 | $3,264,000 |
Net income | $ 600,000 | $ 550,000 |
Dividends: | ||
On preferred stock | (10,000) | (10,000) |
On common stock | (100,000) | (100,000) |
Increase in retained earnings | $ 490,000 | $ 440,000 |
Retained earnings, December 31 | $4,194,000 | $3,704,000 |
Marshall Inc. | ||
Comparative Income Statement | ||
For the Years Ended December 31, 20Y2 and 20Y1 | ||
20Y2 | 20Y1 | |
Sales | $ 10,850,000 | $10,000,000 |
Cost of goods sold | (6,000,000) | (5,450,000) |
Gross profit | $ 4,850,000 | $ 4,550,000 |
Selling expenses | $ (2,170,000) | $ (2,000,000) |
Administrative expenses | (1,627,500) | (1,500,000) |
Total operating expenses | $(3,797,500) | $ (3,500,000) |
Operating income | $ 1,052,500 | $ 1,050,000 |
Other revenue and expense: | ||
Other revenue | 99,500 | 20,000 |
Other expense (interest) | (132,000) | (120,000) |
Income before income tax expense | $ 1,020,000 | $ 950,000 |
Income tax expense | (420,000) | (400,000) |
Net income | $ 600,000 | $ 550,000 |
Marshall Inc. | ||
Comparative Balance Sheet | ||
December 31, 20Y2 and 20Y1 | ||
20Y2 | 20Y1 | |
Assets | ||
Current assets: | ||
Cash | $1,050,000 | $ 950,000 |
Marketable securities | 301,000 | 420,000 |
Accounts receivable (net) | 585,000 | 500,000 |
Inventories | 420,000 | 380,000 |
Prepaid expenses | 108,000 | 20,000 |
Total current assets | $ 2,464,000 | $2,270,000 |
Long-term investments | 800,000 | 800,000 |
Property, plant, and equipment (net) | 5,760,000 | 5,184,000 |
Total assets | $ 9,024,000 | $8,254,000 |
Liabilities | ||
Current liabilities | $ 880,000 | $ 800,000 |
Long-term liabilities: | ||
Mortgage note payable, 6% | $ 200,000 | $ 0 |
Bonds payable, 4% | 3,000,000 | 3,000,000 |
Total long-term liabilities | $ 3,200,000 | $3,000,000 |
Total liabilities | $ 4,080,000 | $3,800,000 |
Stockholders’ Equity | ||
Preferred 4% stock, $5 par | $ 250,000 | $ 250,000 |
Common stock, $5 par | 500,000 | 500,000 |
Retained earnings | 4,194,000 | 3,704,000 |
Total stockholders’ equity | $ 4,944,000 | $4,454,000 |
Total liabilities and stockholders’ equity | $ 9,024,000 | $8,254,000 |
Determine the following measures for 20Y2. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent.
1. Working Capital | $ | |
2. Current ratio | ||
3. Quick ratio | ||
4. Accounts receivable turnover | ||
5. Number of days’ sales in receivables | ||
6. Inventory turnover | ||
7. Number of days’ sales in inventory | ||
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 |
Trinidad TremblayLv2
31 Mar 2020