Case 3 - Analysis Measures of liquidity, Solvency and Profitability The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Retained earnings, January 1 $5,375,000 $4,545,000 Net income $900,000 $925,000 Dividends: On preferred stock (45,000) (45,000) On common stock 50,000) (50,000) Increase in retained earnings $805,000 $830,000 Retained earnings, December 31 $6,180,000 $5,375,000 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 LOY 20Y1 Sales $10,000,000 $9,400,000 Cost of goods sold (5,350,000) (4,950,000) Gross profit $4,650,000 $4,450,000 Selling expenses $(2,000,000) $(1,880,000) Administrative expenses (1,500,000) (1,410,000) Total operating expenses 500,000) $(3,290,000) Operating income $1, 150,000 $1,160,000 Other revenue and expense: Other revenue 150,000 140,000 Other expense (interest) (170,000) 150,000) Income before income tax $1,130,000 $1,150,000 expense Income tax expense 230,000) 225,000) Net income $900,000 $925,000 Stargel Inc. Comparative Balance Sheet December 21 20V? and 20V1Stargel Inc. Comparatlve Balance Sheet December 31, 20V: and 20V1 20V! 20Y1 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 $3,590,000 $3,089,000 Long-item 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, 10% $200,000 $0 Bonds payable, 10% 1,500,000 1,500,000 Total long-term liabilities $1,700,000 $1,500,000 Total liabilities $2,500,000 $2,380,000 Stockholders' Equity Preferred 50.90 stock, $10 per $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 liab ties and stockholders' equity Requlred: $9,780,000 $8,755,000 Determine the following measures for 20Y2, rounding to one decimal place, except dollar amounts which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year. 1.. Working capital $| 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales In receivables days 6. Inventory turnover Total assets Llabllltles Current liabilities $900,000 Long-term liabilities: Mortgage note payable, 10% $200,000 Bonds payable, 10% 1,500,000 Total long-term liabilities $1,700,000 ) Total lia Stockholders' Equity Preferred $0.90 stock, $10 per $500,000 Common stock, $5 par 500,000 Retained earnings 6,180,000 Total stockholders' equity $7.18 00 Total liabilities and stockholders' $9,780,000 equity Required: Determine the following measures for 2012, rounding to one decimal place, except dollar amounts which should be rounded to the nearest oent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year. 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 9. Ratio of liabilities to stockholders' equity 10. Times interest earned 11. Asset turnover 12. Return on total assets 13. Return on stockholders' equity 14. Return on common stockholders' equity 15. Earnings per share on common stock 16. Price-earnings ratio 17. Dividends per share of common stock 18. Dividend yield es $2,600,000 lllllllllll ll iii $880,000 $0 1,500,000 $1,500,000 $2,380,000 $500,000 500,000 5,375,000 $5,375,000 $8,755,000 days days % $ $ \"/0 W1 more Check Mv Work uses remalnlno