Module 3 Application Exercises Calculator eBook Measures of liquidity, solvency, and profitability Instructions Questions Instructions 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, 20Y2 and 20Y1 20Y1 20Y2 $3.264.000.00 Retained eamings, January 1 $3,704.000.00 2 550.000.00 3Net income 600.000.00 $4,304,000.00 $3,814.000.00 4 Total s Dividends $10.000.00 $10,000.00 On preferred stock 100,000.00 100,000.00 On common stock $110,000.00 $110,000.00 Total dividends $5,704,000.00 $4,194,000.00 Retained eamings, December 31 Calculatof Measures of liquidity, solvency, and profitability Instructions Questions Instructions Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1 1 202 201 Sales $10,850.000.00 $10.000,000.00 Cost of goods sold 6,000,000,00 5,450,000.00 3 $4.850,000.00 $4,550,000.00 Gross profit $2.170,000.00 S Selling expenses $2,000,000.00 1,500,000,00 6 Administrative expenses 1,627,500.00 $3,797,500.00 $3.500,000.00 Total operating expenses $1.052.500.00 $1,050,000.00 Income from operations 20.000.00 99,500.00 9 Other income $1.152,000.00 $1.070,000.00 10 132,000.00 120,000.00 Other expense (interest) 11 $1,020,000.00 $950.000.00 12 Income before income tax 420,000.00 400,000.00 13 Income tax expense $550.000,00 $600,000 14 Net income + Measures of liquidity, solvency, and profitability Instructions Questions Instructions December 31, 20Y2 and 20Y1 20Y2 20Y1 1 Assets Current assets: $1050,000.00 $950,000.00 Cash 301.000,00 Marketable securities 420,000.00 500.000.00 Accounts receivable (net) 585.000.00 420.000.00 Inventories 380,000.00 7 108.000,00 20,000,00 Prepaid expenses $2.270.000.00 $2.464,000.00 Total current assets 800.000.00 800,000 00 Long-term investments 10 5,760.000.00 5.184,000,00 Property plant, and equipment (net) 11 $8,254.000,00 $9.024.000.00 12 Total assets Liabilities 13 $880,000.00 $800,000,00 14 Current liabiuties 15 Long-term liabilities $200,000.00 $0.00 Mortgage note payable, 6 % 16 3,000,000.00 3,000,000.00 Bonds payable, 4%, 17 $3,200,000.00 $3,000,000.00 Total long-term liabilities 15 $3.800.000.00 $4,080,000.00 19 Total liabilities Stockholders' Equity 20 $250,000.00 $250,000.00 Preferred 4% stock, $5 par 21 500,000.00 500,000.00 22 Common stock, $5 par n Questions Shaded cells have feedback Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share C amounts): 1. Working Capital 1,584,000 2. Current ratio 2.8 3. Quick ratio 4. Accounts receiva ble turnover 5. Number of days' sales in receivabies 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 % Points: 2/18