Measures of liquidity, Solvency and Profitability The comparative financial statements of Stargel Inc. are as follows. The market price of Starget common stock was $119.70 on December 31, 2012. Stargel Inc Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 2012 20Y1 Retained earnings, January 1 $5,375,000 $4,545,000 Net Income $900,000 5925,000 Dividends: On preferred stock (45,000) (45,000) On common stock (50,000) (50,000) Increase in retained earnings $305,000 3830,000 Retained earnings, December 31 $6,180,000 $5,375,000 Stargel Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 2011 2012 2011 Sales Cost of goods sold Gross profit Selling expenses $10,000,000 (5,350,000) $4,650,000 $(2,000,000) (1,500,000) $(3,500,000) $9,400,000 (4,950,000) $4,450,000 $(1,880,000) (1,410,000) $(3,290,000) $1,160,000 Administrative expenses $1,150,000 Total operating expenses Operating income Other revenue and expense: Other revenue Other expense (interest) 150,000 140,000 (150,000) (170,000) $1,130,000 Income before income tax expense $1,150,000 Income tax expense (230,000) (225,000) Net income $900,000 $925,000 Stargel Inc. Stargel Inc. Comparative Balance Sheet December 31, 20Y2 and 2041 2012 2011 Assets Current assets: Cash Marketable securities Accounts receivable (net) Inventories Prepaid expenses Total current assets Long-term investments Property, plant, and equipment (not) $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 Total assets $900,000 5880,000 Liabilities Current liabilities Long-term liabilities: Mortgage note payable, 10% Bonds payable, 10% Type here to search $200,000 30 1,500,000 1,500,000 O 3 Total long-term liabilities $1,700,000 $1,500,000 Total liabilities $2,600,000 $2,380,000 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 202, rounding to one decimal place, except dollar amounts which should be rounded to the requirement for subsequent requirement, if required. Assume 365 days a year. 1. Working capital 2,790,000 2. Current ratio 3. Quick ratio 2.5 16 4. Accounts receivable turnover 5. Number of days' sales in receivables 22.8 days 6. Inventory turnover 5.00 7. Number of days' sales in Inventory 73 days 5. Number of days' sales in receivables 22.8 days 5.00 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 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
