eBook 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, 2012 Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2012 and 2011 20Y2 20Y1 Retained earnings, January 1 $5,375,000 $4,545,000 Net Income $900,000 $925,000 Dividends: On preferred stock On common stock Increase in retained earnings Retained earnings, December 31 (45,000) (50,000 $805,000 $6,180,000 (45,000) (50,000) $830,000 $5,375,000 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 2011 20Y2 2011 $9,400,000 Sales Cost of goods sold Gross profit Selling expenses $10,000,000 (5,350,000) $4,650,000 $(2,000,000) (4,950,000) $4,450,000 $(1,880,000) Check My Work eBook 20Y1 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 2041 2012 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) Operating Income $1,150,000 Other revenue and expense: Other revenue 150,000 Other expense (interest) (170,000) Income before income tax expense $1,130,000 Income tax expense (230,000) Net income $900,000 $9,400,000 (4,950,000) $4,450,000 $(1,880,000) (1,410,000) $(3,290,000) $1,160,000 140,000 (150,000) $1,150,000 (225,000) $925,000 Stargel Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 2012 2011 Check My Work eBook Stargel Inc. Comparative Balance Sheet December 31, 2012 and 2041 2012 20Y1 Assets Current assets: $400,000 $500,000 1,010,000 740,000 Cash Marketable securities Accounts receivable (net) Inventories Prepaid expenses Total current assets Long-term investments Property, plant, and equipment (net) Total assets 1,190,000 250,000 $3,690,000 2,350,000 3,740,000 1,000,000 510,000 950,000 229,000 $3,089,000 2,300,000 3,366,000 $9,780,000 $8,755,000 Liabilities $900,000 $880,000 Current liabilities Long-term liabilities: Mortgage note payable, 10% Bonds payable, 10% Total long-term Ilabilities Total liabilities Stockholders' Equity $200,000 1,500,000 $1,700,000 $2,600,000 $0 1,500,000 $1,500,000 $2,380,000 eBook Stockholders' Equity Preferred $0.90 stock, $10 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 Required: Determine the following measures for 2012, rounding to one decimal place, except dollar amounts which should be rounded to the nearest cent. Use the round of the requirement for subsequent requirement, if required. Assume 365 days a year. 1. Working capital 2,790,000 2. Current ratio 4.1 3. Quick ratio 2.57 4. Accounts receivable turnover 16.0 X days days 5. Number of days sales in receivables 6. Inventory tumover 7. Number of days' sales in inventory 3. Ratio of fixed assets to long-term liabilitles 9. Ratio of liabilities to stockholders' equity 10. Times interest earned 11. Asel turnover 12. Return on total assets % 13. Retum on stockholders' equity % eBook of the requirement for subsequent requirement, if required. Assume 365 days a year. 1. Working capital 2,790,000 2. Current ratio 4.1 2.5 3. Quick ratio 4. Accounts receivable turnover 16.0 5. Number of days' sales in receivables X days 6. Inventory turnover days 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 TI 17. Dividends per share of common stock % 18. Dividend yield