Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. An asterisk (*) will appear to the right of an incorrect entry. Current Liabilities Current Assets Calculated Value 1. Working capital: Ratio Numerator Denominator Calculated Value 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables 6. Inventory turnove 7. Number of days' sales in invento ---- T + v 200% Zoom T Text to Collaborate View Add Category Insert Table Chart Shape Media Comment Format Organize Pr. 17-4B Sol + o 24 D E G H L M M B 8. Ratio of Fixed assets to long-term liabilit !! 11 - 11 36 27 9. Ratio of liabilities to stockholders' equity 38 39 40 10. Times interest eamed !_! ! ! ! - . IIIIIIII TI IIIIIIII iii IIIIII III III IIIIIIII 42 11. Asset turnover 43 44 12. Return on total assets 45 48 13. Return on stockholders' equity I! 48 I ! . - 49 14. Return on common stockholders' equity 50 !! I 51 52 15. Earnings per share on common sto TI 54 F 55 TI I I' 11 I 16. Price-earnings ratio . - 57 17. Dividends per share of common stoc - -- -- sa 200% - T T Vie +v Insert Do Collaborate @ Format Organiza Zoom Add Category Table Chart Text Shape Media Comment + Pr. 17-4B Sol B D G H M N VI VITITIVITVI 59 60 18. Dividend yield II 11 61 63 64 65 BG 62 68 60 70 71 72 73 The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel common stock was $119.70 on December 31, 20Y2. Excel + Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 Retained earnings, January 1. $5,375,000 Net income 900,000 Total $6,275,000 Dividends: On preferred stock $ 45,000 On common stock. 50,000 Total dividends. $ 95,000 Retained earnings, December 31 $6,180,000 20Y1 $4,545,000 925,000 $5,470,000 $ 45,000 50,000 $ 95,000 $5,375,000 + 20Y1 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 2041 20Y2 $10,000,000 5,350,000 $ 4,650,000 Sales ... Cost of goods sold. Gross profit $9,400,000 4,950,000 $4,450,000 + Stargel Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 2041 20Y2 20Y1 Sales .. Cost of goods sold.. Gross profit. Selling expenses Administrative expenses.. Total operating expenses Income from operations Other income. $10,000,000 5,350,000 $ 4,650,000 $ 2,000,000 1,500,000 $ 3,500,000 $ 1,150,000 150,000 $ 1,300,000 170,000 $ 1,130,000 230,000 $ 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 $1,300,000 150,000 $1,150,000 225,000 $ 925,000 Other expense (interest) Income before income tax Income tax expense... Net income. Stargel Inc. Comparative Balance Sheet December 31, 20Y2 and 2041 20Y2 20Y1 Assets Current assets: Cash Marketable securities.. Accounts receivable (net) Inventories Prepaid expenses Total current assets. Long-term investments $ 500,000 1,010,000 740,000 1,190,000 250,000 $3,690,000 2.350.000 $ 400,000 1,000,000 510,000 950,000 229,000 $3,089,000 2.300.000 Stargel Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 $ 500,000 1,010,000 740,000 1,190,000 250,000 $3,690,000 2,350,000 3,740,000 $9,780,000 $ 400,000 1,000,000 510,000 950,000 229,000 $3,089,000 2,300,000 3,366,000 $8,755,000 Assets Current assets: Cash Marketable securities. Accounts receivable (net) Inventories Prepaid expenses Total current assets. Long-term investments... Property, plant, and equipment (net) Total assets.. Liabilities Current liabilities. Long-term liabilities: Mortgage note payable, 10%. Bonds payable, 10%... Total long-term liabilities Total liabilities Stockholders' Equity Preferred $0.90 stock, $10 par Common stock, $5 par. Retained earnings. Total stockholders' equity. Total liabilities and stockholders' equity. $ 900,000 $ 880,000 $ 200,000 1,500,000 $1,700,000 $2,600,000 $ 0 1,500,000 $1,500,000 $2,380,000 $ 500,000 500,000 6,180,000 $7,180,000 $9,780,000 $ 500,000 500,000 5,375,000 $6,375,000 $8,755,000 Instructions Determine the following measures for 20Y2, rounding to one decimal place including percentages, 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 Answer Check Figure: Ratio of liabilities to stockholders' equity, 0.4 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
