The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 62 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 $1,808,800 $1,544,500 Net income 414,400 316,300 Total $2,223,200 $1,860,800 Dividends: On preferred stock $13,300 $13,300 On common stock 38,700 38,700 Total dividends $52,000 $52,000 Retained earnings, December 31 $2,171,200 $1,808,800 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $2,413,380 $2,223,550 Cost of goods sold 825,630 759,580 Gross profit $1,587,750 $1,463,970 Selling expenses $541,940 $662,800 Administrative expenses 461,660 389,260 Total operating expenses $1,003,600 $1,052,060 Income from operations $584,150 $411,910 Other revenue 30,750 26,290 $614,900 $438,200 Other expense (interest) 144,000 79,200 Income before income tax $470,900 $359,000 Income tax expense 56,500 42,700 Net income $414,400 $316,300 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $414,390 $420,800 Marketable securities 627,180 697,320 Accounts receivable (net) 430,700 401,500 Inventories 321,200 248,200 Prepaid expenses 78,402 84,160 Total current assets $1,871,872 $1,851,980 Long-term investments 1,154,288 559,046 Property, plant, and equipment (net) 2,340,000 2,106,000 Total assets $5,366,160 $4,517,026 Liabilities Current liabilities $584,960 $908,226 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 $2,384,960 $1,898,226 Stockholders' Equity Preferred $0.70 stock, $20 par $380,000 $380,000 Common stock, $10 par 430,000 430,000 Retained earnings 2,171,200 1,808,800 Total stockholders' equity $2,981,200 $2,618,800 Total liabilities and stockholders' equity $5,366,160 $4,517,026 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

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 62 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 $1,808,800 $1,544,500 Net income 414,400 316,300 Total $2,223,200 $1,860,800 Dividends: On preferred stock $13,300 $13,300 On common stock 38,700 38,700 Total dividends $52,000 $52,000 Retained earnings, December 31 $2,171,200 $1,808,800 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $2,413,380 $2,223,550 Cost of goods sold 825,630 759,580 Gross profit $1,587,750 $1,463,970 Selling expenses $541,940 $662,800 Administrative expenses 461,660 389,260 Total operating expenses $1,003,600 $1,052,060 Income from operations $584,150 $411,910 Other revenue 30,750 26,290 $614,900 $438,200 Other expense (interest) 144,000 79,200 Income before income tax $470,900 $359,000 Income tax expense 56,500 42,700 Net income $414,400 $316,300 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 Assets Current assets Cash $414,390 $420,800 Marketable securities 627,180 697,320 Accounts receivable (net) 430,700 401,500 Inventories 321,200 248,200 Prepaid expenses 78,402 84,160 Total current assets $1,871,872 $1,851,980 Long-term investments 1,154,288 559,046 Property, plant, and equipment (net) 2,340,000 2,106,000 Total assets $5,366,160 $4,517,026 Liabilities Current liabilities $584,960 $908,226 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 $2,384,960 $1,898,226 Stockholders' Equity Preferred $0.70 stock, $20 par $380,000 $380,000 Common stock, $10 par 430,000 430,000 Retained earnings 2,171,200 1,808,800 Total stockholders' equity $2,981,200 $2,618,800 Total liabilities and stockholders' equity $5,366,160 $4,517,026 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

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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The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 62 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	$1,808,800		$1,544,500
Net income	414,400		316,300
Total	$2,223,200		$1,860,800
Dividends:
	On preferred stock	$13,300		$13,300
	On common stock	38,700		38,700
		Total dividends	$52,000		$52,000
Retained earnings, December 31	$2,171,200		$1,808,800

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2	20Y1
Sales	$2,413,380		$2,223,550
Cost of goods sold	825,630		759,580
Gross profit	$1,587,750		$1,463,970
Selling expenses	$541,940		$662,800
Administrative expenses	461,660		389,260
Total operating expenses	$1,003,600		$1,052,060
Income from operations	$584,150		$411,910
Other revenue	30,750		26,290
	$614,900		$438,200
Other expense (interest)	144,000		79,200
Income before income tax	$470,900		$359,000
Income tax expense	56,500		42,700
Net income	$414,400		$316,300

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
	20Y2	20Y1
Assets
Current assets
	Cash	$414,390		$420,800
	Marketable securities	627,180		697,320
	Accounts receivable (net)	430,700		401,500
	Inventories	321,200		248,200
	Prepaid expenses	78,402		84,160
		Total current assets	$1,871,872		$1,851,980
Long-term investments	1,154,288		559,046
Property, plant, and equipment (net)	2,340,000		2,106,000
Total assets	$5,366,160		$4,517,026
Liabilities
Current liabilities	$584,960		$908,226
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	$2,384,960		$1,898,226
Stockholders' Equity
Preferred $0.70 stock, $20 par	$380,000		$380,000
Common stock, $10 par	430,000		430,000
Retained earnings	2,171,200		1,808,800
Total stockholders' equity	$2,981,200		$2,618,800
Total liabilities and stockholders' equity	$5,366,160		$4,517,026

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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