Measure for liquidity, solvency, and profitability.

Measures of liquidity, solvency, and profitability 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, 20Y2 and 2041 20Y2 2011 Retained earnings, January 1 $3,704,000 $3,264,000 Net income $ 600,000 $ 550,000 Dividends: On preferred stock (10,000) (10,000) On common stock (100,000) (100,000) Increase in retained earnings $ 490,000 $ 440,000 Retained earnings, December 31 $4,194,000 $3,704 000 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 2041 2012 20Y1 Sales $ 10,850,000 $10,000,000 Cost of goods sold (6,000,000) (5,450,000) Gross profit $ 4,850,000 $ 4,550,000 Selling expenses $ (2,170,000) $ (2,000,000) Administrative expenses (1,627,500) (1,500,000) Total operating expenses $(3,797,500) $ (3,500,000) Operating income $ 1,052,500 $ 1,050,000 Other revenue and expense: Other revenue 99,500 20,000 Other expense (interest) (132,000) (120,000) Income before income tax expense $ 1,020,000 $ 950,000 Income tax expense (420,000) (400,000) Net income $ 600,000 $ 550,000 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 2041 2042 20Y1 Assets Current assets: Cash Marketable securities Accounts receivable (net) Inventories Prepaid expenses Total current assets Long-term investments Property, plant, and equipment (net) $1,050,000 301,000 585,000 420,000 108,000 $ 2,464,000 800,000 5,760,000 $ 9,024,000 $ 950,000 420,000 500,000 380,000 20,000 $2,270,000 800,000 5,184,000 $8,254,000 Total assets $ 880,000 $ 800,000 Liabilities 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, $5 par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 200,000 3,000,000 $ 3,200,000 $ 4,080,000 $ 0 3,000,000 $3,000,000 $3,800,000 $ 250,000 500,000 4,194,000 $ 4,944,000 $ 9,024,000 $ 250,000 500,000 3,704,000 $4,454,000 $8,254,000 Determine the following measures for 2012. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent. Determine the following measures for 2012. Round to one decimal place, including percentages, except for per-share amounts, which should be rounded to the nearest cent. 1. Working Capital 1,584,000 2. Current ratio 2.8 3. Quick ratio 2.8 X 4. Accounts receivable turnover 20 5. Number of days' sales in receivables 18 X 6. Inventory turnover 15 V 7. Number of days' sales in inventory 24 x 8. Ratio of fixed assets to long-term liabilities 2.05 X 9. Ratio of liabilities to stockholders' equity 0.83 X 10. Times interest eamed 8.7 11. Asset turnover 14.4 X 12. Return on total assets 0.07 X % 13. Return on stockholders' equity 12.77 X% 14. Return on common stockholders' equity 13.26 X % 15. Earnings per share on common stock $ 5.9 16. Price-earnings ratio 14 17. Dividends per share of common stock 1 18. Dividend yield 0.12 X% Feedback Check My Work 1. Subtract current liabilities from current assets. 2. Divide current assets by current liabilities. 3. Divide quick assets by current liabilities. Quick assets are cash, temporary investments, and receivables. 4. Divide sales by average accounts receivable. Average Accounts receivable = (Beginning Net Accounts Receivable + Ending Net Accounts Receivable) + 2. 5. Divide average accounts receivable by average daily sales. Average Accounts receivable = (Beginning Net Accounts Receivable + Ending Net Accounts Receivable) + 2. Average daily sales are sales divided by 365 days. 6. Divide cost of goods sold by average inventory. Average Inventory = (Beginning Inventories + Ending Inventories) - 2. 7. Divide average inventory by average daily cost of goods sold. Average Inventory = (Beginning Inventories + Ending Inventories) - 2. Average daily cost of goods sold is cost of goods sold divided by 365 days. 8. Divide property, plant, and equipment (net) by long-term liabilities. 9. Divide total liabilities by total stockholders' equity. 10. Divide the sum of income before income tax expense and interest expense by interest expense. 11. Divide sales by average total assets, excluding long-term investments. Average total assets = (Beginning total assets + Ending total assets) + 2. 12. Divide the sum of net income and interest expense by average total assets. Average total assets = (Beginning total assets + Ending total assets) = 2. 13. Divide net income by average total stockholders' equity. Average total stockholders' equity = (Beginning total stockholders' equity + Ending total stockholders' equity) + 2. 14. Divide net income minus preferred dividends from the retained earnings statement by average common stockholders' equity. Common stockholders equity = Common stock + Retained eamings. Average common stockholders' equity = (Beginning com stockholders' equity + Ending common stockholders' equity) +2. 15. Divide net income minus preferred dividends from the retained earnings statement by common shares outstanding (common stock - par value). 16. Divide common market share price by common earnings per share (use answer from requirement 15). 17. Divide common dividends (from Retained Earnings Statement) by common shares outstanding (common stock + par value). 18. Divide common dividends per share (use answer from requirement 17) by market share price