Measures of liquidity, Solvency, and ProfitabilityThe comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 61 on December 31, 20Y2.Marshall Inc.Comparative Retained Earnings StatementFor the Years Ended December 31, 20Y2 and 20Y1      20Y2     20Y1Retained earnings, January 1$4,135,050 $3,490,250 Net income960,000 714,900 Total$5,095,050 $4,205,150 Dividends:     On preferred stock$11,900 $11,900  On common stock58,200 58,200   Total dividends$70,100 $70,100 Retained earnings, December 31$5,024,950 $4,135,050 Marshall Inc.Comparative Income StatementFor the Years Ended December 31, 20Y2 and 20Y1      20Y2     20Y1Sales$5,259,650 $4,846,000 Cost of goods sold1,905,300 1,752,880 Gross profit$3,354,350 $3,093,120 Selling expenses$1,079,350 $1,358,360 Administrative expenses919,450 797,770 Total operating expenses$1,998,800 $2,156,130 Income from operations$1,355,550 $936,990 Other revenue71,350 59,810  $1,426,900 $996,800 Other expense (interest)336,000 184,800 Income before income tax$1,090,900 $812,000 Income tax expense130,900 97,100 Net income$960,000 $714,900 Marshall Inc.Comparative Balance SheetDecember 31, 20Y2 and 20Y1      20Y2     20Y1Assets Current assets   Cash$870,600 $999,790  Marketable securities1,317,660 1,656,780  Accounts receivable (net)985,500 927,100  Inventories744,600 569,400  Prepaid expenses164,712 199,960   Total current assets$4,083,072 $4,353,030 Long-term investments3,617,838 2,106,113 Property, plant, and equipment (net)4,620,000 4,158,000 Total assets$12,320,910 $10,617,143 LiabilitiesCurrent liabilities$1,275,960 $2,352,093 Long-term liabilities:   Mortgage note payable, 8%$1,890,000 $0  Bonds payable, 8%2,310,000 2,310,000   Total long-term liabilities$4,200,000 $2,310,000 Total liabilities$5,475,960 $4,662,093 Stockholders' Equity  Preferred $0.70 stock, $50 par$850,000 $850,000 Common stock, $10 par970,000 970,000 Retained earnings5,024,950 4,135,050 Total stockholders' equity$6,844,950 $5,955,050 Total liabilities and stockholders' equity$12,320,910 $10,617,143 Required:Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year. 7.   Number of days' sales in inventory days8.  Ratio of fixed assets to long-term liabilities   Return on common stockholders’ equity %15.  Earnings per share on common stock$ 16.   Price-earnings ratio  17.  Dividends per share of common stock$ 18.   Dividend yield

Question
Asked Nov 26, 2019
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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 $ 61 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 $4,135,050   $3,490,250  
Net income 960,000   714,900  
Total $5,095,050   $4,205,150  
Dividends:        
  On preferred stock $11,900   $11,900  
  On common stock 58,200   58,200  
    Total dividends $70,100   $70,100  
Retained earnings, December 31 $5,024,950   $4,135,050  



Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
       20Y2      20Y1
Sales $5,259,650   $4,846,000  
Cost of goods sold 1,905,300   1,752,880  
Gross profit $3,354,350   $3,093,120  
Selling expenses $1,079,350   $1,358,360  
Administrative expenses 919,450   797,770  
Total operating expenses $1,998,800   $2,156,130  
Income from operations $1,355,550   $936,990  
Other revenue 71,350   59,810  
  $1,426,900   $996,800  
Other expense (interest) 336,000   184,800  
Income before income tax $1,090,900   $812,000  
Income tax expense 130,900   97,100  
Net income $960,000   $714,900  



Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
       20Y2      20Y1
Assets  
Current assets    
  Cash $870,600   $999,790  
  Marketable securities 1,317,660   1,656,780  
  Accounts receivable (net) 985,500   927,100  
  Inventories 744,600   569,400  
  Prepaid expenses 164,712   199,960  
    Total current assets $4,083,072   $4,353,030  
Long-term investments 3,617,838   2,106,113  
Property, plant, and equipment (net) 4,620,000   4,158,000  
Total assets $12,320,910   $10,617,143  
Liabilities
Current liabilities $1,275,960   $2,352,093  
Long-term liabilities:    
  Mortgage note payable, 8% $1,890,000   $0  
  Bonds payable, 8% 2,310,000   2,310,000  
    Total long-term liabilities $4,200,000   $2,310,000  
Total liabilities $5,475,960   $4,662,093  
Stockholders' Equity    
Preferred $0.70 stock, $50 par $850,000   $850,000  
Common stock, $10 par 970,000   970,000  
Retained earnings 5,024,950   4,135,050  
Total stockholders' equity $6,844,950   $5,955,050  
Total liabilities and stockholders' equity $12,320,910   $10,617,143  

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.

 

7.   Number of days' sales in inventory   days
8.  Ratio of fixed assets to long-term liabilities
   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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Expert Answer

Step 1

Hey, since there are multiple requirements posted, we will answer first three requirements. If you want any specific question(s) to be answered then please submit that question only or specify the requirement number in your message.

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7. Compute the number of days' sales in inventory:

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Number of Days Average inventory sales in Average cost of goods sold S744, 600+S569,400 2 $1,905,300 365 $657,000 5,220 125.86

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Step 3

16. Price-earnings ratio...

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Market price per share Price eanings ratio= Earnings per share $61 $16.29 =3.75 times

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