Nineteen Measures of Solvency and Profitability

The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $62 on December 31, 2016.

Blige Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 2016 and 2015
			2016		2015
Retained earnings, January 1			$2,489,825		$2,103,075
Add net income for year			524,400		430,800
Total			$3,014,225		$2,533,875
Deduct dividends
	On preferred stock		$7,000		$7,000
	On common stock		37,050		37,050
		Total	$44,050		$44,050
Retained earnings, December 31			$2,970,175		$2,489,825

Blige Inc.
Comparative Income Statement
For the Years Ended December 31, 2016 and 2015
	2016		2015
Sales	$3,697,600		$3,401,800
Sales returns and allowances	18,400		11,960
Sales	$3,679,200		$3,389,840
Cost of goods sold	1,267,280		1,165,900
Gross profit	$2,411,920		$2,223,940
Selling expenses	$857,210		$1,022,310
Administrative expenses	730,210		600,410
Total operating expenses	1,587,420		1,622,720
Income from operations	$824,500		$601,220
Other income	43,400		38,380
	$867,900		$639,600
Other expense (interest)	272,000		149,600
Income before income tax	$595,900		$490,000
Income tax expense	71,500		59,200
Net income	$524,400		$430,800

Blige Inc.
Comparative Balance Sheet
December 31, 2016 and 2015
			Dec. 31, 2016		Dec. 31, 2015
Assets
Current assets
	Cash		$680,160		$427,210
	Temporary investments		1,029,430		707,950
	Accounts receivable (net)		678,900		635,100
	Inventories		511,000		394,200
	Prepaid expenses		128,670		85,440
		Total current assets	$3,028,160		$2,249,900
Long-term investments			1,716,208		-128,338
Property, plant, and equipment (net)			3,740,000		3,366,000
Total assets			$8,484,368		$5,487,562
Liabilities
Current liabilities			$1,044,193		$57,737
Long-term liabilities
	Mortgage note payable, 8%, due 2021		$1,530,000		$0
	Bonds payable, 8%, due 2017		1,870,000		1,870,000
		Total long-term liabilities	$3,400,000		$1,870,000
Total liabilities			$4,444,193		$1,927,737
Stockholders' Equity
Preferred $0.7 stock, $50 par			$500,000		$500,000
Common stock, $10 par			570,000		570,000
Retained earnings			2,970,175		2,489,825
	Total stockholders' equity		$4,040,175		$3,559,825
Total liabilities and stockholders' equity			$8,484,368		$5,487,562

Required:

Determine the following measures for 2016, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.

5. The relationship between sales and accounts receivable, computed by dividing the average accounts receivable by the average daily sales.Number of days' sales in receivables		days
6. The relationship between the volume of goods sold and inventory, computed by dividing the cost of goods sold by the average inventory.Inventory turnover
7. The relationship between the volume of sales and inventory, computed by dividing average inventory by the average daily cost of goods sold.Number of days' sales in inventory		days
8. The ratio of fixed assets to long-term liabilities provides a measure of whether note-holders or bondholders will be paid.Ratio of fixed assets to long-term liabilities
10. A ratio that measures creditor margin of safety for interest payments, calculated as income before income tax + interest expense divided by interest expense.Number of times interest charges are earned
12. Ratio that measures how effectively a company uses its assets, computed as sales divided by average total assets.Ratio of sales to assets
13. A measure of profitability of assets, without regard to the portion of assets financed by creditors or stockholders.Rate earned on total assets		%
14. A measure of profitability computed by dividing net income by average stockholders' equity.Rate earned on stockholders' equity		%
15. A measure of profitability computed by dividing net income, reduced by preferred dividend requirements, by average common stockholders' equity.Rate earned on common stockholders' equity		%
16. The profitability ratio of net income available to common shareholders to the number of common shares outstanding.Earnings per share on common stock	$
17. The ratio of the market price per share of common stock, at a specific date, to the annual earnings per share.Price-earnings ratio
18. Measures the extent to which earnings are being distributed to common shareholders.Dividends per share of common stock	$
19. A ratio, computed by dividing the annual dividends paid per share of common stock by the market price per share at a specific date, that indicates the rate of return to stockholders in terms of cash dividend distributions.Dividend yield