Instructions Questions Instructions The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 2012. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2012 and 2011 2072 2071 2 Retained earnings, January 1 $3,704,000.00 $3,264,000.00 3 Net income 600,000.00 550,000.00 4 Total $4,304,000.00 $3,814,000.00 5 Dividends: 6 On preferred stock $10,000.00 $10,000.00 7 On common stock 100,000.00 100,000.00 Total dividends $110,000.00 $110,000.00 9 Retained earnings, December 31 $4,194,000.00 $3,704,000.00 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 2011 2072 2071 2 Sales $10,850,000.00 $10,000,000.00 3 Cost of goods sold 6,000,000.00 5,450,000.00 4 Gross profit $4,850,000.00 $4,550,000.00 5 Selling expenses $2,170,000.00 $2,000,000.00 6 Administrative expenses 1,627,500.00 1,500,000.00 7 Total operating expenses $3,797,500.00 $3,500,000.00 8 Income from operations $1,052,500.00 $1,050,000.00 9 Other income 99,500.00 20,000.00 $1,152,000.00 $1,070,000.00 11 Other expense interest) 132,000.00 120,000.00 12 Income before income tax $1,020,000.00 $950,000.00 13 Income tax expense 420,000.00 400,000.00 14 Net income $600,000.00 $550,000.00 14 Net income $600,000.00 $550,000.00 Marshall Inc. Comparative Balance Sheet December 31, 2012 and 2041 2012 2011 Assets 3 Current assets: 4 Cash $1,050,000.00 $950,000.00 5 Marketable securities 301,000.00 420,000.00 6 Accounts receivable (net) 585,000.00 500,000.00 Inventories 420,000.00 380,000.00 8 Prepaid expenses 108,000.00 20,000.00 9 Total current assets $2,464,000.00 $2,270,000.00 10 Long-term investments 800,000.00 800,000.00 11 Property, plant, and equipment (net) 5,760,000.00 5,184,000.00 12 Total assets $9,024,000.00 $8,254,000.00 Liabilities 14 Current liabilities $880,000.00 $800,000.00 15 Long-term Liabilities: 16 Mortgage note payable, 6%, $200,000.00 $0.00 17 Bonds payable, 4%, 3,000,000.00 3,000,000.00 18 Total long-term Liabilities $3,200,000.00 $3,000,000.00 19 Total liabilities $4,080,000.00 $3,800,000.00 Stockholders' Equity 21 Preferred 4% stock, $5 par $250,000.00 $250,000.00 22 Common stock, 55 par 500,000.00 500,000.00 23 Retained earnings 4,194,000.00 3,704,000.00 24 Total stockholders' equity $4,944,000.00 $4,454,000.00 25 Total liabilities and stockholders' equity $9,024,000.00 $8,254,000.00 Determine the following measures for 2012 (round 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 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 Questions Shaded cells have feedback. Determine the following measures for 2012 (round to one decimal place, including percentages, except for per-share amounts): 1. Working Capital 1,584,000 2. Current ratio 2.8 3. Quick ratio 2.2 4. Accounts receivable turnover 20.0 5. Number of days' sales in receivables 18.3 6. Inventory turnover 15.0 7. Number of days' sales in inventory 24.3 8. Ratio of fixed assets to long-term liabilities 1.8 9. Ratio of liabilities to stockholders' equity 0.8 10. Times interest earned 8.7 11. Asset turnover 1.3 X 12. Return on total assets 7.0 % % 13. Return on stockholders' equity 12.1 x % 14. Return on common stockholders' equity 118.0 x % 15. Earnings per share on common stock $ 5.90 16. Price-earnings ratio 0.9 x 17. Dividends per share of common stock $ 18. Dividend yield 20.0 % % Points: - 12/18 1.0V