Six Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year. Property, plant, and equipment (net) $1,320,500 Liabilities: Current liabilities $139,000 Note payable, 6%, due in 15 years 695,000 Total liabilities $834,000 Stockholders' equity: Preferred $4 stock, $100 par (no change during year) $500,400 Common stock, $10 par (no change during year) 500,400 Retained earnings: Balance, beginning of year $534,000 Net income 211,000 $745,000 Preferred dividends $20,016 Common dividends 57,784 77,800 Balance, end of year 667,200 Total stockholders' equity $1,668,000 Sales $10,977,750 Interest expense $41,700 Assuming that total assets were $2,377,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place. a. Ratio of fixed assets to long-term liabilities fill in the blank 1 b. Ratio of liabilities to stockholders' equity fill in the blank 2 c. Asset turnover fill in the blank 3

Managerial Accounting: The Cornerstone of Business Decision-Making

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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 52E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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Six Measures of Solvency or Profitability

The following data were taken from the financial statements of Gates Inc. for the current fiscal year.

Property, plant, and equipment (net)				$1,320,500
Liabilities:
	Current liabilities		$139,000
	Note payable, 6%, due in 15 years		695,000
	Total liabilities				$834,000
Stockholders' equity:
	Preferred $4 stock, $100 par (no change during year)				$500,400
	Common stock, $10 par (no change during year)				500,400
Retained earnings:
	Balance, beginning of year	$534,000
	Net income	211,000	$745,000
	Preferred dividends	$20,016
	Common dividends	57,784	77,800
	Balance, end of year				667,200
Total stockholders' equity				$1,668,000
Sales				$10,977,750
Interest expense				$41,700

Assuming that total assets were $2,377,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place.

a. Ratio of fixed assets to long-term liabilities	fill in the blank 1
b. Ratio of liabilities to stockholders' equity	fill in the blank 2
c. Asset turnover	fill in the blank 3
d. Return on total assets	fill in the blank 4%
e. Return on stockholders’ equity	fill in the blank 5%
f. Return on common stockholders' equity	fill in the blank 6%

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