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, 2012 and 20Y1 2012 20Y1 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 $4,194,000 $3,704,000 Retained earnings, December 31 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 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 20Y1 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 2012 Assets Current assets: Cash $1,050,000 Marketable securities 301,000 Accounts receivable (net) 585,000 Inventories 420,000 Prepaid expenses 108,000 Total current assets $ 2,464,000 Long-term investments 800,000 Property, plant, and equipment (net) 5,760,000 Total assets $ 9,024,000 $ 950,000 420,000 500,000 380,000 20,000 $2,270,000 800,000 5,184,000 $8,254,000 $ 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 $ 0 3,000,000 3,000,000 $ 3,200,000 $3,000,000 $ 4,080,000 $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 20Y2. Round to one decimal place, including percentages, except for per- share amounts, which should be rounded to the nearest cent. 1,584,000 2.8 2.2 20 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 $ %
