Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 51 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 $3,609,825 $3,039,675 Net income 772,800 622,600 Dividends: On preferred stock (13,300) (13,300) On common stock (39,150) (39,150) Retained earnings, December 31 $4,330,175 $3,609,825 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $5,014,005 $4,619,600 Cost of merchandise sold 1,696,520 1,560,800 Gross profit $3,317,485 $3,058,800 Selling expenses $1,172,660 $1,400,700 Administrative expenses 998,935 822,630 Total operating expenses $2,171,595 $2,223,330 Income from operations $1,145,890 $835,470 Other revenue and expense: Other revenue 60,310 53,330 Other expense (interest) (328,000) (180,800) Income before income tax expense $878,200 $708,000 Income tax expense 105,400 85,400 Net income $772,800 $622,600 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $907,950 $687,900 Marketable securities 1,374,190 1,139,950 Accounts receivable (net) 905,200 854,100 Inventories 686,200 525,600 Prepaid expenses 171,766 137,580 Total current assets $4,045,306 $3,345,130 Long-term investments 1,949,027 16,723 Property, plant, and equipment (net) 5,330,000 4,797,000 Total assets $11,324,333 $8,158,853 Liabilities Current liabilities $1,264,158 $659,028 Long-term liabilities: Mortgage note payable, 8% $1,840,000 $0 Bonds payable, 8% 2,260,000 2,260,000 Total long-term liabilities $4,100,000 $2,260,000 Total liabilities $5,364,158 $2,919,028 Stockholders' Equity Preferred $0.70 stock, $40 par $760,000 $760,000 Common stock, $10 par 870,000 870,000 Retained earnings 4,330,175 3,609,825 Total stockholders' equity $5,960,175 $5,239,825 Total liabilities and stockholders' equity $11,324,333 $8,158,853 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 $fill in the blank 1 2. Current ratio fill in the blank 2 3. Quick ratio fill in the blank 3 4. Accounts receivable turnover fill in the blank 4 5. Number of days' sales in receivables fill in the blank 5 days 6. Inventory turnover fill in the blank 6 7. Number of days' sales in inventory fill in the blank 7 days 8. Ratio of fixed assets to long-term liabilities fill in the blank 8 9. Ratio of liabilities to stockholders' equity fill in the blank 9 10. Times interest earned fill in the blank 10 11. Asset turnover fill in the blank 11 12. Return on total assets fill in the blank 12 % 13. Return on stockholders’ equity fill in the blank 13 % 14. Return on common stockholders’ equity fill in the blank 14 % 15. Earnings per share on common stock $fill in the blank 15 16. Price-earnings ratio fill in the blank 16 17. Dividends per share of common stock $fill in the blank 17 18. Dividend yield fill in the blank 18 %
Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 51 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 $3,609,825 $3,039,675 Net income 772,800 622,600 Dividends: On preferred stock (13,300) (13,300) On common stock (39,150) (39,150) Retained earnings, December 31 $4,330,175 $3,609,825 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $5,014,005 $4,619,600 Cost of merchandise sold 1,696,520 1,560,800 Gross profit $3,317,485 $3,058,800 Selling expenses $1,172,660 $1,400,700 Administrative expenses 998,935 822,630 Total operating expenses $2,171,595 $2,223,330 Income from operations $1,145,890 $835,470 Other revenue and expense: Other revenue 60,310 53,330 Other expense (interest) (328,000) (180,800) Income before income tax expense $878,200 $708,000 Income tax expense 105,400 85,400 Net income $772,800 $622,600 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets: Cash $907,950 $687,900 Marketable securities 1,374,190 1,139,950 Accounts receivable (net) 905,200 854,100 Inventories 686,200 525,600 Prepaid expenses 171,766 137,580 Total current assets $4,045,306 $3,345,130 Long-term investments 1,949,027 16,723 Property, plant, and equipment (net) 5,330,000 4,797,000 Total assets $11,324,333 $8,158,853 Liabilities Current liabilities $1,264,158 $659,028 Long-term liabilities: Mortgage note payable, 8% $1,840,000 $0 Bonds payable, 8% 2,260,000 2,260,000 Total long-term liabilities $4,100,000 $2,260,000 Total liabilities $5,364,158 $2,919,028 Stockholders' Equity Preferred $0.70 stock, $40 par $760,000 $760,000 Common stock, $10 par 870,000 870,000 Retained earnings 4,330,175 3,609,825 Total stockholders' equity $5,960,175 $5,239,825 Total liabilities and stockholders' equity $11,324,333 $8,158,853 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 $fill in the blank 1 2. Current ratio fill in the blank 2 3. Quick ratio fill in the blank 3 4. Accounts receivable turnover fill in the blank 4 5. Number of days' sales in receivables fill in the blank 5 days 6. Inventory turnover fill in the blank 6 7. Number of days' sales in inventory fill in the blank 7 days 8. Ratio of fixed assets to long-term liabilities fill in the blank 8 9. Ratio of liabilities to stockholders' equity fill in the blank 9 10. Times interest earned fill in the blank 10 11. Asset turnover fill in the blank 11 12. Return on total assets fill in the blank 12 % 13. Return on stockholders’ equity fill in the blank 13 % 14. Return on common stockholders’ equity fill in the blank 14 % 15. Earnings per share on common stock $fill in the blank 15 16. Price-earnings ratio fill in the blank 16 17. Dividends per share of common stock $fill in the blank 17 18. Dividend yield fill in the blank 18 %
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter17: Financial Statement Analysis
Section: Chapter Questions
Problem 4PA: Measures of liquidity, solvency, and profitability The comparative financial statements of Marshall...
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Measures of liquidity, Solvency, and Profitability
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 51 on December 31, 20Y2.
Marshall Inc. | |||||
Comparative |
|||||
For the Years Ended December 31, 20Y2 and 20Y1 | |||||
20Y2 | 20Y1 | ||||
Retained earnings, January 1 | $3,609,825 | $3,039,675 | |||
Net income | 772,800 | 622,600 | |||
Dividends: | |||||
On |
(13,300) | (13,300) | |||
On common stock | (39,150) | (39,150) | |||
Retained earnings, December 31 | $4,330,175 | $3,609,825 |
Marshall Inc. | ||||
Comparative Income Statement | ||||
For the Years Ended December 31, 20Y2 and 20Y1 | ||||
20Y2 | 20Y1 | |||
Sales | $5,014,005 | $4,619,600 | ||
Cost of merchandise sold | 1,696,520 | 1,560,800 | ||
Gross profit | $3,317,485 | $3,058,800 | ||
Selling expenses | $1,172,660 | $1,400,700 | ||
Administrative expenses | 998,935 | 822,630 | ||
Total operating expenses | $2,171,595 | $2,223,330 | ||
Income from operations | $1,145,890 | $835,470 | ||
Other revenue and expense: | ||||
Other revenue | 60,310 | 53,330 | ||
Other expense (interest) | (328,000) | (180,800) | ||
Income before income tax expense | $878,200 | $708,000 | ||
Income tax expense | 105,400 | 85,400 | ||
Net income | $772,800 | $622,600 |
Marshall Inc. | ||||||
Comparative Balance Sheet | ||||||
December 31, 20Y2 and 20Y1 | ||||||
20Y2 | 20Y1 | |||||
Assets | ||||||
Current assets: | ||||||
Cash | $907,950 | $687,900 | ||||
Marketable securities | 1,374,190 | 1,139,950 | ||||
905,200 | 854,100 | |||||
Inventories | 686,200 | 525,600 | ||||
Prepaid expenses | 171,766 | 137,580 | ||||
Total current assets | $4,045,306 | $3,345,130 | ||||
Long-term investments | 1,949,027 | 16,723 | ||||
Property, plant, and equipment (net) | 5,330,000 | 4,797,000 | ||||
Total assets | $11,324,333 | $8,158,853 | ||||
Liabilities | ||||||
Current liabilities | $1,264,158 | $659,028 | ||||
Long-term liabilities: | ||||||
Mortgage note payable, 8% | $1,840,000 | $0 | ||||
Bonds payable, 8% | 2,260,000 | 2,260,000 | ||||
Total long-term liabilities | $4,100,000 | $2,260,000 | ||||
Total liabilities | $5,364,158 | $2,919,028 | ||||
Preferred $0.70 stock, $40 par | $760,000 | $760,000 | ||||
Common stock, $10 par | 870,000 | 870,000 | ||||
Retained earnings | 4,330,175 | 3,609,825 | ||||
Total stockholders' equity | $5,960,175 | $5,239,825 | ||||
Total liabilities and stockholders' equity | $11,324,333 | $8,158,853 |
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. |
$fill in the blank 1 | |
2. |
fill in the blank 2 | |
3. Quick ratio | fill in the blank 3 | |
4. Accounts receivable turnover | fill in the blank 4 | |
5. Number of days' sales in receivables | fill in the blank 5 | days |
6. Inventory turnover | fill in the blank 6 | |
7. Number of days' sales in inventory | fill in the blank 7 | days |
8. Ratio of fixed assets to long-term liabilities | fill in the blank 8 | |
9. Ratio of liabilities to stockholders' equity | fill in the blank 9 | |
10. Times interest earned | fill in the blank 10 | |
11. Asset turnover | fill in the blank 11 | |
12. Return on total assets | fill in the blank 12 | % |
13. Return on stockholders’ equity | fill in the blank 13 | % |
14. Return on common stockholders’ equity | fill in the blank 14 | % |
15. Earnings per share on common stock | $fill in the blank 15 | |
16. Price-earnings ratio | fill in the blank 16 | |
17. Dividends per share of common stock | $fill in the blank 17 | |
18. Dividend yield | fill in the blank 18 | % |
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