Measures of liquidity, solvency, and profitabilityThe comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.Marshall Inc.Comparative Retained Earnings StatementFor the Years Ended December 31, 20Y2 and 20Y120Υ220Υ1Retained earnings, January 1$3,704,000$3,264,000Net income$ 600,000$ 550,000Dividends:On preferred stock(10,000)(10,000)On common stock(100,000)(100,000)Increase in retained earnings$ 490,000$ 440,000Retained earnings, December 31$4,194,000$3,704,000Marshall Inc.Comparative Income StatementFor the Years Ended December 31, 20Y2 and 20Y120Y220Υ1Sales$ 10,850,000$10,000,000Cost of goods sold(6,000,000)(5,450,000)$ 4,850,000$ (2,170,000)Gross profit$ 4,550,000Selling expenses$ (2,000,000)Administrative expenses(1,627,500)(1,500,000)Total operating expenses$(3,797,500)$ (3,500,000)Operating income$ 1,052,500$ 1,050,000Other revenue and expense:Other revenue99,50020,000Other expense (interest)(132,000)(120,000)Income before income tax expense$ 1,020,000$ 950,000Income tax expense(420,000)(400,000)Net income$ 600,000$ 550,000Marshall Inc.Comparative Balance SheetDecember 31, 20Y2 and 20Y120Y220Υ1AssetsCurrent assets:Cash$1,050,000$ 950,000Marketable securities301,000420,000Accounts receivable (net)585,000500,000Inventories420,000380,000Prepaid expenses108,00020,000 Total current assets$ 2,464,000$2,270,000Long-term investments800,000800,000Property, plant, and equipment (net)5,760,0005,184,000Total assets$ 9,024,000$8,254,000LiabilitiesCurrent liabilities$ 880,000$ 800,000Long-term liabilities:Mortgage note payable, 6%$ 200,000$0Bonds payable, 4%3,000,0003,000,000Total long-term liabilities$ 3,200,000$3,000,000Total liabilities$ 4,080,000$3,800,000Stockholders' EquityPreferred 4% stock, $5 par$ 250,000$ 250,000Common stock, $5 par500,000500,000Retained earnings4,194,0003,704,000Total stockholders' equity$ 4,944,000$4,454,000Total liabilities and stockholders' equity$ 9,024,000$8,254,000Determine the following measures for 20Y2. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent.1. Working Capital1,584,0002. Current ratio2.83. Quick ratio2.24. Accounts receivable turnover205. Number of days' sales in receivables18.36. Inventory turnover157. Number of days' sales in inventory18.3 X8. Ratio of fixed assets to long-term liabilities1.89. Ratio of liabilities to stockholders' equity0.810. Times interest earned8.711. Asset turnover1.3 X12. Return on total assets8.513. Return on stockholders' equity12.814. Return on common stockholders' equity13.3 V %15. Earnings per share on common stock5.916. Price-earnings ratio1417. Dividends per share of common stock1.018. Dividend yield1.2

Formula: Asset turnover ratio = Net sales / Average Total Assets

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2 Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 $3,704,000 $3,264,000 $ 600,000 $ 550,000 Retained earnings, January 1 Net income Dividends: On preferred stock On common stock (10,000) (10,000) (100,000) $ 490,000 (100,000) Increase in retained earnings $ 440,000 Retained earnings, December 31 $4,194,000 $3,704,000 MarshalL Inc.

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2 Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 $3,704,000 $3,264,000 $ 600,000 $ 550,000 Retained earnings, January 1 Net income Dividends: On preferred stock On common stock (10,000) (10,000) (100,000) $ 490,000 (100,000) Increase in retained earnings $ 440,000 Retained earnings, December 31 $4,194,000 $3,704,000 MarshalL Inc.

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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