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 2011 $4,545,000 Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2012 and 2041 2012 Retained earnings, January 1 $5,375,000 Net income $900,000 Dividends: On preferred stock (45,000) On common stock (50,000) Increase in retained earnings $805,000 Retained earnings, December 31 $6,180,000 $925,000 (45,000) (50,000) $830,000 $5,375,000 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 2041 2012 2011 eininnnnn can non 2011 Comparative Income Statement For the Years Ended December 31, 2012 and 2011 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 Comparative Balance Sheet December 31, 2012 and 2011 2012 2011 Assets Ourrent assets: Cash $500,000 1,010,000 740,000 1,190,000 Marketable securities Accounts receivable (net) Inventories Prepaid expenses Total current assets > Long-term investments Property, plant, and equipment (net) Total assets 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 Liabilities Current liabilities $900,000 $880,000 $0 Long-term liabilities: Mortgage note payable, 10% Bonds payable, 10% Total long-term ilabilities $200,000 1,500,000 $1,700,000 1,500,000 $1,500,000 WELCOME ZA 2. Current ratio 4.1 3. Quick ratio 2.5 4. Accounts receivable turnover 16 5. Number of days' sales in receivables 22.8 days 5 73 days 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 2.2 0.4 10. Times interest earned 7.6 11. Asset turnover 1.1 x 12. Return on total assets 11.5% 13. Return on stockholders' equity 13.3 % 14. Return on common stockholders' equity 13.6 % 15. Earnings per share on common stock 8.55 14 16. Price-earnings ratio 7. Dividends per share of common stock 8. Dividend yield 0.50 0.4 % S. Divide average accounts rosale by average daily sales. Average Accounts receivable (Beginning Net Accounts Receivable + Ending Net Accounts Receiva). 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 so divided by 365 days. 8. Divide property, plant, and equipment (net) by long-term liabilities 9. Divide total abilities 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 + Retain carnings. Average common stockholders' equity - (Beginning common 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