Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 55 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 $ 1,806,225 $ 1,533,375 Net income 408,800 314,100 Total $2,215,025 $ 1,847,475 Dividends: On preferred stock $ 13,300 $ 13,300 On common stock 27,950 27,950 Total dividends $ 41,250 $ 41,250 Retained earnings, December 31 $ 2,173,775 $ 1,806,225 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $ 2,330,160 $ 2,146,930 Cost of goods sold 797,160 733,390 Gross profit $ 1,533,000 $ 1,413,540 Selling expenses $ 515,660 $ 632,210 Administrative expenses 439,270 371,300 Total operating expenses $954,930 $1,003,510 Income from operations $ 578,070 $ 410,030 Other revenue 30,430 26,170 $ 608,500 $ 436,200 Other expense (interest) 144,000 79,200 Income before income tax $ 464,500 $ 357,000 Income tax expense 55,700 42,900 Net income $ 408,800 $ 314,100 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $ 460,270 $ 444,200 Marketable securities 696,620 736,110 Accounts receivable (net) 430,700 401,500 Inventories 321,200 248,200 Prepaid expenses 87,078 88,840 Total current assets $ 1,995,868 $ 1,918,850 Long-term investments 1,034,927 655,264 Property, plant, and equipment (net) 2,340,000 2,106,000 Total assets $ 5,370,795 $ 4,680,114 Liabilities Current liabilities $ 587,020 $ 1,073,889 Long-term liabilities: Mortgage note payable, 8% $ 810,000 $ 0 Bonds payable, 8% 990,000 990,000 Total long-term liabilities $ 1,800,000 $ 990,000 Total liabilities $ 2,387,020 $ 2,063,889 Stockholders' Equity Preferred $0.70 stock, $20 par $ 380,000 $ 380,000 Common stock, $10 par 430,000 430,000 Retained earnings 2,173,775 1,806,225 Total stockholders' equity $ 2,983,775 $ 2,616,225 Total liabilities and stockholders' equity $ 5,370,795 $ 4,680,114 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 $ 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables days 6. Inventory turnover 7. Number of days' sales in inventory days 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 % How do I solve this?

Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 55 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 $ 1,806,225 $ 1,533,375 Net income 408,800 314,100 Total $2,215,025 $ 1,847,475 Dividends: On preferred stock $ 13,300 $ 13,300 On common stock 27,950 27,950 Total dividends $ 41,250 $ 41,250 Retained earnings, December 31 $ 2,173,775 $ 1,806,225 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $ 2,330,160 $ 2,146,930 Cost of goods sold 797,160 733,390 Gross profit $ 1,533,000 $ 1,413,540 Selling expenses $ 515,660 $ 632,210 Administrative expenses 439,270 371,300 Total operating expenses $954,930 $1,003,510 Income from operations $ 578,070 $ 410,030 Other revenue 30,430 26,170 $ 608,500 $ 436,200 Other expense (interest) 144,000 79,200 Income before income tax $ 464,500 $ 357,000 Income tax expense 55,700 42,900 Net income $ 408,800 $ 314,100 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $ 460,270 $ 444,200 Marketable securities 696,620 736,110 Accounts receivable (net) 430,700 401,500 Inventories 321,200 248,200 Prepaid expenses 87,078 88,840 Total current assets $ 1,995,868 $ 1,918,850 Long-term investments 1,034,927 655,264 Property, plant, and equipment (net) 2,340,000 2,106,000 Total assets $ 5,370,795 $ 4,680,114 Liabilities Current liabilities $ 587,020 $ 1,073,889 Long-term liabilities: Mortgage note payable, 8% $ 810,000 $ 0 Bonds payable, 8% 990,000 990,000 Total long-term liabilities $ 1,800,000 $ 990,000 Total liabilities $ 2,387,020 $ 2,063,889 Stockholders' Equity Preferred $0.70 stock, $20 par $ 380,000 $ 380,000 Common stock, $10 par 430,000 430,000 Retained earnings 2,173,775 1,806,225 Total stockholders' equity $ 2,983,775 $ 2,616,225 Total liabilities and stockholders' equity $ 5,370,795 $ 4,680,114 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 $ 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables days 6. Inventory turnover 7. Number of days' sales in inventory days 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 % How do I solve this?

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 $ 55 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	$ 1,806,225		$ 1,533,375
Net income	408,800		314,100
Total	$2,215,025		$ 1,847,475
Dividends:
	On preferred stock	$ 13,300		$ 13,300
	On common stock	27,950		27,950
		Total dividends	$ 41,250		$ 41,250
Retained earnings, December 31	$ 2,173,775		$ 1,806,225

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2	20Y1
Sales	$ 2,330,160		$ 2,146,930
Cost of goods sold	797,160		733,390
Gross profit	$ 1,533,000		$ 1,413,540
Selling expenses	$ 515,660		$ 632,210
Administrative expenses	439,270		371,300
Total operating expenses	$954,930		$1,003,510
Income from operations	$ 578,070		$ 410,030
Other revenue	30,430		26,170
	$ 608,500		$ 436,200
Other expense (interest)	144,000		79,200
Income before income tax	$ 464,500		$ 357,000
Income tax expense	55,700		42,900
Net income	$ 408,800		$ 314,100

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
	20Y2	20Y1
Assets
Current assets
	Cash	$ 460,270		$ 444,200
	Marketable securities	696,620		736,110
	Accounts receivable (net)	430,700		401,500
	Inventories	321,200		248,200
	Prepaid expenses	87,078		88,840
		Total current assets	$ 1,995,868		$ 1,918,850
Long-term investments	1,034,927		655,264
Property, plant, and equipment (net)	2,340,000		2,106,000
Total assets	$ 5,370,795		$ 4,680,114
Liabilities
Current liabilities	$ 587,020		$ 1,073,889
Long-term liabilities:
	Mortgage note payable, 8%	$ 810,000		$ 0
	Bonds payable, 8%	990,000		990,000
		Total long-term liabilities	$ 1,800,000		$ 990,000
Total liabilities	$ 2,387,020		$ 2,063,889
Stockholders' Equity
Preferred $0.70 stock, $20 par	$ 380,000		$ 380,000
Common stock, $10 par	430,000		430,000
Retained earnings	2,173,775		1,806,225
Total stockholders' equity	$ 2,983,775		$ 2,616,225
Total liabilities and stockholders' equity	$ 5,370,795		$ 4,680,114

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	$
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Number of days' sales in receivables		days
6. Inventory turnover
7. Number of days' sales in inventory		days
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		%

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