Assets Current assets Cash Marketable securities Accounts receivable (net) Inventories Prepaid items Total current assets Investments Plant (net) Land Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Notes payable Accounts payable Salaries payable Total current liabilities Noncurrent liabilities FRANKLIN COMPANY Balance Sheets As of December 31 Year 4 Year 3 $19,500 $15,500 20,700 6,700 48,000 40,000 133,000 141,000 27,000 12,000 248,200 215,200 22,000 15,000 290,000 275,000 33,000 28,000 $593,200 $533,200 $31,200 $18,200 133,800 120,000 22,000 16,000 187,000 154,200 Bonds payable Other 110,000 110,000 31,000 26,000 Total noncurrent liabilities 141,000 136,000 Total liabilities 328,000 290,200 Stockholders' equity Preferred stock, (par value $10, 5% cumulative, non-participating; 7,000 shares authorized and issued) Common stock (no par; 50,000 shares authorized; 10,000 shares issued) Retained earnings 70,000 $70,000 70,000 70,000 125,200 103,000 Total stockholders' equity. Total liabilities and stockholders' equity 265,200 243,000 $593,200 $533,200 FRANKLIN COMPANY Statements of Income and Retained Earnings For the Years Ended December 31 Revenues Sales (net) Other revenues Total revenues Expenses Cost of goods sold Selling, general, and administrative Interest expense Income tax expense Total expenses Net earnings (net income) Retained earnings, January 1 Less: Preferred stock dividends Common stock dividends Retained earnings, December 31 Required Year 4 Year 3 $300,000 9,400 309,400 $280,000 6,400 286,400 $150,000 $124,000 62,000 57,000 10,100 9,300 58,000 57,000 280,100 247,300 $29,300 $39,100 103,000 71,000 3,500 3,500 3,600 $125,200 3,600 $103,000 Calculate the following ratios for Year 1 and Year 2. When data limitations prohibit computing averages, use year-end balances in your calculations a. Working capital. b. Current ratio. (Round your answers to 2 decimal places.) c. Quick ratio. (Round your answers to 2 decimal places.) d. Receivables turnover (beginning receivables at January 1, Year 3, were $41,000) (Round your answers to 2 decimal places.) e. Average days to collect accounts receivable. (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) f. Inventory turnover (beginning inventory at January 1, Year 3, was $147,000). (Round your answers to 2 decimal places.) g. Number of days to sell inventory (Use 365 days in a year. Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole number.) h. Debt-to-assets ratio. (Round your answers to the nearest whole percent.) i. Debt-to-equity ratio. (Round your answers to 2 decimal places.) J. Number of times interest was earned (Round your answers to 2 decimal places.) k. Plant assets to long-term debt. (Round your answers to 2 decimal places.) 1. Net margin. (Round your answers to 2 decimal places.) m. Turnover of assets (average total assets in Year 3 is $533,200) (Round your answers to 2 decimal places.) TURTUVE U assets (average was a 200 u your answers. n. Return on investment (average total assets in Year 3 is $533,200) (Round your answers to 2 decimal places.) o. Return on equity (average stockholders' equity in Year 3 is $243,000). (Round your answers to 2 decimal places.) p. Earnings per share (total shares outstanding is unchanged). (Round your answers to 2 decimal places.) q. Book value per share of common stock. (Round your answers to 2 decimal places.) r. Price-earnings ratio (market price per share: Year 3, $12.10, Year 4, $13.20) (Round your intermediate calculations and final answer to 2 decimal places.) s. Dividend yield on common stock (Round your answers to 2 decimal places.) a Working capital b. Current ratio c. Quick ratio d Receivables turnover (beginning receivables at January 1, Year 3, were $41,000) e Average days to collect accounts receivable L Inventory turnover (beginning inventory at January 1, Year 3, was $147,000) 19 Number of days to sell inventory nces h Debt-to-assets ratio Debt-to-equity ratio Number of times interest was earned k Plant assets to long-term debt L Net margin m Turnover of assets (average total assets in Year 3 is $533,200) n Return on investment (average total assets in Year 3 is $533,200) 0 Return on equity (average stockholders' equity in Year 3 is $243,000), p Earnings per share (total shares outstanding is unchanged) a Book value per share of common stock t S Price-eamings ratio (market price per share. Year 3, $12.10; Year 4, $13.20) Dividend yield on common stock Year 4 Year 3 times times days days times times days days % % times times % % % % per share % % per share per share per share %