Chapter 17 Financial Statement Analysis 873 Number of days receivables. 18.3 PR 17-44 Measures of liquidity, solvency, and profitability OB, 3, 4, 5 The comparative financial statens of Marshall Ins are as follows. The market price of Marshall n o w was $2.00 on December 31, 2012 Marshall Comparative Retained Earnings Statement For the Year Ended December 31, 2012 and 2011 2012 Retained earnings, January 1. ********* $3.704,000 ** ************** Net income... $4,304,000 Total ******** Dividends: 10,000 On preferred stock ........ On common stock 100.000 $ 110,000 $ 110,000 Total dividends ********* Retained earnings, December 31 .. $4,194.000 $3.704.000 Comparative Income Statement For the Years Ended December 31, 2012 and 2011 .... * Sales ............ . . Cost of goods sold...... Gross profit........... Selling expenses. Administrative expenses. Total operating expenses .... Income from operations .... Other revenue 2012 $10,850,000 6.000.000 $ 4,850,000 $ 2,170,000 1.627.500 $ 3.797,500 $ 1,052,500 99.500 $ 1152,000 132.000 $ 1.020.000 420.000 $ 600,000 2011 $10,000,000 5450.000 $4,550,000 $ 2.000.000 1,500,000 $ 3.500.000 $ 1.050.000 20.000 $ 1.070,000 120,000 $ 950.000 Other expense interest)... Income before income tax ...... Income tax expense.... Net Income ......... 400000 $ 550,000 Comparative Balance Sheet December 31, 2012 and 2011 2012 Current assets Cash. Marketable securities.... Accounts receivable Inet)..... Inventories ... Prepaid expenses. Total current assets... Long-term investments.... Property, plant, and equipment (net) .. Total assets. $1.050,000 301.000 585,000 420,000 108,000 $ 2464.000 800,000 $ 950.000 420.000 500.000 380,000 20.000 $2,270,000 800,000 5,184 000 $8.254,000 $9.024,000 $ 80.000 $ 800,000 $ 200,000 3,000,000 $ 3.200.000 $4,000,000 3.000.000 $1.000,000 $3,800,000 Current liabilities.... . Long-term liabilities: Mortgage note payable, 6%. Bonds payable, 4%.. Total long-term liabilities. Total liabilities ... Stockholders' Equity Preferred 4% stock, $5 par....... Common stock, 55 par..... Retained earnings...... Total stockholders'equity........ Total liabilities and stockholders' equity..... $ 250.000 500,000 4,194,000 $ 4,944,000 $ 9,024,000 $ 250,000 500,000 3.704,000 $4,454,000 58.254,000 (Continued) er 17 Financial Statement Analysis Instructions Determine the following measures for 20Y2, rounding to one decimal place, including per- centages, except for per-share amounts: 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
