Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 63 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 $1,022,050 $862,950 Net income 233,600 176,800 Total $1,255,650 $1,039,750 Dividends: On preferred stock $7,700 $7,700 On common stock 10,000 10,000 Total dividends $17,700 $17,700 Retained earnings, December 31 $1,237,950 $1,022,050 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $1,470,220 $1,354,620 Cost of goods sold 571,590 525,860 Gross profit $898,630 $828,760 Selling expenses $291,610 $366,610 Administrative expenses 248,400 215,310 Total operating expenses $540,010 $581,920 Income from operations $358,620 $246,840 Other revenue 18,880 15,760 $377,500 $262,600 Other expense (interest) 112,000 61,600 Income before income tax $265,500 $201,000 Income tax expense 31,900 24,200 Net income $233,600 $176,800 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $345,040 $199,520 Marketable securities 522,220 330,630 Accounts receivable (net) 284,700 270,100 Inventories 219,000 175,200 Prepaid expenses 65,275 39,900 Total current assets $1,436,235 $1,015,350 Long-term investments 610,460 75,113 Property, plant, and equipment (net) 1,540,000 1,386,000 Total assets $3,586,695 $2,476,463 Liabilities Current liabilities $478,745 $214,413 Long-term liabilities: Mortgage note payable, 8% $630,000 $0 Bonds payable, 8% 770,000 770,000 Total long-term liabilities $1,400,000 $770,000 Total liabilities $1,878,745 $984,413 Stockholders' Equity Preferred $0.70 stock, $20 par $220,000 $220,000 Common stock, $10 par 250,000 250,000 Retained earnings 1,237,950 1,022,050 Total stockholders' equity $1,707,950 $1,492,050 Total liabilities and stockholders' equity $3,586,695 $2,476,463 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 %

Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 63 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 $1,022,050 $862,950 Net income 233,600 176,800 Total $1,255,650 $1,039,750 Dividends: On preferred stock $7,700 $7,700 On common stock 10,000 10,000 Total dividends $17,700 $17,700 Retained earnings, December 31 $1,237,950 $1,022,050 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $1,470,220 $1,354,620 Cost of goods sold 571,590 525,860 Gross profit $898,630 $828,760 Selling expenses $291,610 $366,610 Administrative expenses 248,400 215,310 Total operating expenses $540,010 $581,920 Income from operations $358,620 $246,840 Other revenue 18,880 15,760 $377,500 $262,600 Other expense (interest) 112,000 61,600 Income before income tax $265,500 $201,000 Income tax expense 31,900 24,200 Net income $233,600 $176,800 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $345,040 $199,520 Marketable securities 522,220 330,630 Accounts receivable (net) 284,700 270,100 Inventories 219,000 175,200 Prepaid expenses 65,275 39,900 Total current assets $1,436,235 $1,015,350 Long-term investments 610,460 75,113 Property, plant, and equipment (net) 1,540,000 1,386,000 Total assets $3,586,695 $2,476,463 Liabilities Current liabilities $478,745 $214,413 Long-term liabilities: Mortgage note payable, 8% $630,000 $0 Bonds payable, 8% 770,000 770,000 Total long-term liabilities $1,400,000 $770,000 Total liabilities $1,878,745 $984,413 Stockholders' Equity Preferred $0.70 stock, $20 par $220,000 $220,000 Common stock, $10 par 250,000 250,000 Retained earnings 1,237,950 1,022,050 Total stockholders' equity $1,707,950 $1,492,050 Total liabilities and stockholders' equity $3,586,695 $2,476,463 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 %

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...

See similar textbooks

Related questions

Question

Measures of liquidity, Solvency, and Profitability

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 63 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	$1,022,050		$862,950
Net income	233,600		176,800
Total	$1,255,650		$1,039,750
Dividends:
	On preferred stock	$7,700		$7,700
	On common stock	10,000		10,000
		Total dividends	$17,700		$17,700
Retained earnings, December 31	$1,237,950		$1,022,050

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2	20Y1
Sales	$1,470,220		$1,354,620
Cost of goods sold	571,590		525,860
Gross profit	$898,630		$828,760
Selling expenses	$291,610		$366,610
Administrative expenses	248,400		215,310
Total operating expenses	$540,010		$581,920
Income from operations	$358,620		$246,840
Other revenue	18,880		15,760
	$377,500		$262,600
Other expense (interest)	112,000		61,600
Income before income tax	$265,500		$201,000
Income tax expense	31,900		24,200
Net income	$233,600		$176,800

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
	20Y2	20Y1
Assets
Current assets
	Cash	$345,040		$199,520
	Marketable securities	522,220		330,630
	Accounts receivable (net)	284,700		270,100
	Inventories	219,000		175,200
	Prepaid expenses	65,275		39,900
		Total current assets	$1,436,235		$1,015,350
Long-term investments	610,460		75,113
Property, plant, and equipment (net)	1,540,000		1,386,000
Total assets	$3,586,695		$2,476,463
Liabilities
Current liabilities	$478,745		$214,413
Long-term liabilities:
	Mortgage note payable, 8%	$630,000		$0
	Bonds payable, 8%	770,000		770,000
		Total long-term liabilities	$1,400,000		$770,000
Total liabilities	$1,878,745		$984,413
Stockholders' Equity
Preferred $0.70 stock, $20 par	$220,000		$220,000
Common stock, $10 par	250,000		250,000
Retained earnings	1,237,950		1,022,050
Total stockholders' equity	$1,707,950		$1,492,050
Total liabilities and stockholders' equity	$3,586,695		$2,476,463

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		%

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

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.