Question
17-3 17-19 Six Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year.
17-3 17-19
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) |
|
|
|
| $1,915,200 | |
Liabilities: |
|
|
|
|
| |
| Current liabilities |
|
| $201,000 |
|
|
| Note payable, 6%, due in 15 years |
|
| 1,008,000 |
|
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| Total liabilities |
|
|
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| $1,209,000 |
Stockholders' equity: |
|
|
|
|
| |
| Preferred $4 stock, $100 par (no change during year) |
|
|
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| $1,813,500 |
| Common stock, $10 par (no change during year) |
|
|
|
| 1,813,500 |
Retained earnings: |
|
|
|
|
| |
| Balance, beginning of year | $1,934,000 |
|
|
|
|
| Net income | 685,000 |
| $2,619,000 |
|
|
| Preferred dividends | $72,540 |
|
|
|
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| Common dividends | 128,460 |
| 201,000 |
|
|
| Balance, end of year |
|
|
|
| 2,418,000 |
Total stockholders' equity |
|
|
|
| $6,045,000 | |
Sales |
|
|
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| $44,556,750 | |
Interest expense |
|
|
|
| $60,480 |
Assuming that total assets were $6,891,000 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 |
|
b. Ratio of liabilities to stockholders' equity |
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c. Asset turnover |
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d. Return on total assets | % |
e. Return on stockholders equity | % |
f. Return on common stockholders' equity | % |
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