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, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2012 and 2041 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 20Y2 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 2041 20Y2 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, 2012 and 2041 2012 2011 Assets Current assets: Cash $1,050,000 $950,000 Marketable securities 301,000 420,000 Accounts receivable (net) 585,000 500,000 Inventories 420,000 380,000 Prepaid expenses 108,000 20,000 Total current assets $2,464,000 $2,270,000 Long-term investments 800,000 800,000 Property, plant, and equipment (net) 5,760,000 5,184,000 Total assets $9,024,000 $8,254,000 Liabilities Current liabilities $ 880,000 $ 800,000 Long-term liabilities: Mortgage note payable, 6% $200,000 $0 Bonds payable, 4% 3,000,000 3,000,000 Total long-term liabilities $3,200,000 $3,000,000 Total liabilities $4,080,000 $3,800,000 Stockholders' Equity Preferred 4% stock, $5 par $250,000 $250,000 Common stock, $5 par 500,000 500,000 Retained earnings 4,194,000 3,704,000 Total stockholders' equity $4,944,000 $4,454,000 Total liabilities and stockholders' equity $9,024,000 $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. 1. Working Capital 1,584,000 2. Current ratio 2.8 3. Quick ratio 2.2 4. Accounts receivable turnover 20 X days 19 5. Days' sales in receivables 6. Inventory turnover 15 7. Days' sales in inventory days 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 8.0 * * * 11. Asset turnover 1.3 12. Return on total assets % 6.9 13. Return on stockholders' equity % 12.8 14. Return on common stockholders' equity % * % 26.5 $ * 11.8 * 15. Earnings per share on common stock 1 16. Price-earnings ratio 7 $ * 17. Dividends per share of common stock 2 * % 2.4 18. Dividend yield
