11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Times interest earned Times preferred dividends earned Asset turnover Return on total assets Return on stockholders' equity Return on common stockholders' equity Earnings per share on common stock Price-earnings ratio Dividends per share of common stock Dividend yield :1 - :1 :1! [:1 :1 3;: [:1 $:] :1 times times % % % % Twenty metrics of liquidity, Solvency, and Profitability The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $54 on December 31, 20Y8. AUTOMOTIVE SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 20Y8 and 20Y7 20Y8 20Y7 Sales $3,482,100 $3,208,180 Cost of goods sold 1,403,060) (1,290,820) Gross profit $2,079,040 $1,917,360 Selling expenses $(639,440) $(803,460) Administrative expenses (544,700) (471,880) Total operating expenses (1,184,140) (1,275,340) Operating income $894,900 $642,020 Other revenue and expense: Other income 47,100 40,980 Other expense (interest) (232,000) (128,000) Income before income tax $710,000 $555,000 Income tax expense (85,200) (66,900) Net income $624,800 $488,100 AUTOMOTIVE SOLUTIONS INC. Comparative Statement of Stockholders' Equity For the Years Ended December 31, 20Y8 and 20Y7 20Y8 20Y7 Preferred Common Retained Preferred Common Retained Stock Stock Earnings Stock stock Earnings Balances, Jan. 1 $600,000 $680,000 $2,828,800 $600,000 $680,000 $2,383,100 Net income 624,800 488,100 Dividends: Preferred stock (8,400) (8,400) Common stock 34,000) (34,000) Balances, Dec. 31 $600,000 $680,000 $3,411,200 $600,000 $680,000 $2,828,800 AUTOMOTIVE SOLUTIONS INC. Comparative Balance Sheet December 31, 20Y8 and 20Y7 Dec. 31, 20Y8 Dec. 31, 20Y7 Assets Current assets: Cash $538,080 $604,130 Temporary investments 814,390 1,001,120 Accounts receivable (net) 678,900 635,100 Inventories 511,000 394,200 Prepaid expenses 101,806 120,830 Total current assets 2,644,176 $2,755,380 Long-term investments 2,319,984 833,062 Property, plant, and equipment (net) 3,480,000 3,132,000 Total assets $8,444,160 $6,720,442 Liabilities Current liabilities $852,960 $1,011,642 Long-term liabilities: Mortgage note payable, 8%, due in 15 years $1,300,000 $0 Bonds payable, 8%, due in 20 years 1,600,000 1,600,000 Total long-term liabilities $2,900,000 $1,600,000 Total liabilities $3,752,960 2,611,642 Stockholders' Equity Preferred $0.70 stock, $50 par $600,000 $600,000 Common stock, $10 par 680,000 680,000 Retained earnings 3,411,200 2,828,800 Total stockholders' equity $4,691,200 $4,108,800 Total liabilities and stockholders' equity $8,444,160 $6,720,442 Instructions: Determine the following measures for 20Y8. Round ratio values to one decimal place and dollar amounts to the nearest cent. For number of days' sales in receivables and number of days' sales in inventory, round intermediate calculations to the nearest whole dollar and final amounts to one decimal place. Assume there are 365 days in the year. 1. Working capital 1,791,216 V 2. Current ratio 3.1 3. Quick ratio 2.4 4. Accounts receivable turnover 5.3 5. Days' sales in receivables 68.9 v days Inventory turnover 3.1
