9. Ratio of liabilities to stockholders' equity, 0.4 EHREADSHEETS PR 17-4B Nineteen measures of solvency and profitability OBJ. 2,3 The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel Inc. common stock was $119.70 on December 31, 2014 Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2014 and 2013 2014 2013 Retained earnings, January 1. $5,375,000 $4,545,000 Add net income for year 900,000 925.000 Total $6.275,000 55.470.000 Deduct dividends: On preferred stock $ 45,000 $ 45,000 On common stock 50,000 50.000 Total $ 95,000 $ 95,000 Retained earnings. December 31 $6.180,000 55.375,000 Continued Stargel Inc. Comparative Income Statement For the Years Ended December 31, 2014 and 2013 2014 Sales (all on account) $10,050,000 Sales returns and allowances. 50,000 Net sales $10,000,000 Cost of goods sold. 5,350,000 Gross profit.. $ 4,650,000 Selling expenses $ 2,000,000 Administrative expenses.... 1,500,000 Total operating expenses $ 3,500,000 Income from operations .... $ 1,150,000 Other Income.. 150,000 $ 1,300,000 Other expense (interest)..... 170,000 Income before income tax ... $ 1.130,000 Income tax expense... 230,000 Net Income $ 900.000 . 2013 $9,450,000 50,000 59,400,000 4,950,000 $4,450,000 $1,880,000 1,410,000 $3,290,000 $1,160,000 140,000 $1,300,000 150,000 $1,150,000 225,000 $ 925,000 Net Income $ 900,000 $ 925,000 Stargel Inc. Comparative Balance Sheet December 31, 2014 and 2013 Dec 31, 2014 Dec 31, 2013 Assets Current assets: Cash $ 500,000 $ 400,000 Marketable securities 1,010,000 1,000,000 Accounts receivable (net). 740,000 510,000 Inventories... 1,190,000 950,000 Prepaid expenses 250,000 229.000 Total current assets... $3,690,000 $3,089,000 Long-term investments 2,350,000 2,300,000 Property, plant, and equipment (net) 3,740,000 3,366,000 Total assets $9,780,000 $8,755.000 Liabilities Current liabilities $900,000 $ 880,000 Long-term liabilities: Mortgage note payable, 8%, due 2019. $ 200,000 $ 0 Bonds payable, 10%, due 2015.. 1,500,000 1,500,000 Total long-term Habilities $1,700,000 $1,500,000 Total liabilities... $2,600,000 $2,380,000 Stockholders' Equity Preferred 0.90 stock, 510 par $ 500,000 $ 500,000 Common stock. $5 par. 500,000 500,000 Retained earnings... 6.180,000 5,375,000 Total stockholders' equity $7,180,000 $6,375,000 Total liabilities and stockholders' equity $9.780,000 $8.755.000 Instructions Determine the following measures for 2014, rounding to one decimal place, except per share amounts which should be rounded to the nearest penny 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables 6. Inventory turnover 7. Number of days' sales in inventory 8. Ratio of fixed assets to long term liabilities
