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Obj. 3, 4, 5 V S. Days' sales in receivables, 228 P9-4 Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of Automotive

Obj. 3, 4, 5 V S. Days' sales in receivables, 228 P9-4 Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of Automotive Solutions Inc are as follows. The mar- ket price of Automotive Solutions Inc. common stock was $119.70 on December 31, 2018, AUTOMOTIVE SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 2078 and 2017 20Y8 2017 Sales $10,000,000 5 9.400,000 Cost of goods sold (5.350.000 (4.950,000) Gross profit $ 4,650,000 $ 4450,000 Selling expenses $ 12,000,000 $11,880,000) Administrative expenses (1.500.000 (1.410,000) Total operating expenses $ 3.500.000 $13.290,000) Operating income $ 1,150,000 5 1.160,000 Other revenue and expense: Other revenue 150,000 140,000 Other expense interest) (170,000) (150,000) Income before income tax $ 1.130,000 $ 1,150,000 Income tax expense (230 000 1225.000 Net income 900.000 $ 925,000 AUTOMOTIVE SOLUTIONS INC. Comparative Statement of Stockholders' Equity For the Years Ended December 31, 2018 and 2077 20Y8 2017 Preferred Common Retained Preferred Common Retained Stock Stock Earnings Stock Stock Earnings Balances, Jan, 1 $500,000 $500,000 $5,375,000 $500,000 $500,000 $4,545,000 Net income 900,000 925,000 Dividends: Preferred stock (45,000) (45.000) Common stock (50,000) (50,000) Balances, Dec 31 $500,000 $500,000 $6,180,000 $500,000 $500,000 $5,375,000 Dec 31, 2017 AUTOMOTIVE SOLUTIONS INC. Comparative Balance Sheet December 31, 2048 and 2017 Dec 31, 2078 Assets Current assets: Cash $ 500.000 Marketable securities 1,010,000 Accounts receivable (net) 740,000 Inventories 1,190,000 Prepaid expenses 250,000 Total current assets $3,690,000 Long-term investments 2.350.000 Property, plant, and equipment (net) 3,740.000 Total assets $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 Chapter 9 Metric-Analysis of Financial Statements 403 $ 900,000 $ 880,000 Liabilities Current liabilities Long-term liabilities: Mortgage note payable 10% Bonds payable, 10% Total long-term liabilities Total liabilities Stockholders'Equity Preferred $0.90 stock $10 par Common stock, 55 par Retained earnings Total stockholders' equity Total liabilities and stockholders'equity $ 200,000 1,500,000 $1,700,000 $2,600,000 $ 0 1,500,000 $1,500,000 $2,380,000 $ 500,000 500,000 6,180,000 57.180,000 $9,780,000 $ 500,000 500,000 5,375,500 $6,375,000 58,755,000 Next Page Obj. 3, 4, 5 V S. Days' sales in receivables, 228 P9-4 Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of Automotive Solutions Inc are as follows. The mar- ket price of Automotive Solutions Inc. common stock was $119.70 on December 31, 2018, AUTOMOTIVE SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 2078 and 2017 20Y8 2017 Sales $10,000,000 5 9.400,000 Cost of goods sold (5.350.000 (4.950,000) Gross profit $ 4,650,000 $ 4450,000 Selling expenses $ 12,000,000 $11,880,000) Administrative expenses (1.500.000 (1.410,000) Total operating expenses $ 3.500.000 $13.290,000) Operating income $ 1,150,000 5 1.160,000 Other revenue and expense: Other revenue 150,000 140,000 Other expense interest) (170,000) (150,000) Income before income tax $ 1.130,000 $ 1,150,000 Income tax expense (230 000 1225.000 Net income 900.000 $ 925,000 AUTOMOTIVE SOLUTIONS INC. Comparative Statement of Stockholders' Equity For the Years Ended December 31, 2018 and 2077 20Y8 2017 Preferred Common Retained Preferred Common Retained Stock Stock Earnings Stock Stock Earnings Balances, Jan, 1 $500,000 $500,000 $5,375,000 $500,000 $500,000 $4,545,000 Net income 900,000 925,000 Dividends: Preferred stock (45,000) (45.000) Common stock (50,000) (50,000) Balances, Dec 31 $500,000 $500,000 $6,180,000 $500,000 $500,000 $5,375,000 Dec 31, 2017 AUTOMOTIVE SOLUTIONS INC. Comparative Balance Sheet December 31, 2048 and 2017 Dec 31, 2078 Assets Current assets: Cash $ 500.000 Marketable securities 1,010,000 Accounts receivable (net) 740,000 Inventories 1,190,000 Prepaid expenses 250,000 Total current assets $3,690,000 Long-term investments 2.350.000 Property, plant, and equipment (net) 3,740.000 Total assets $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 Chapter 9 Metric-Analysis of Financial Statements 403 $ 900,000 $ 880,000 Liabilities Current liabilities Long-term liabilities: Mortgage note payable 10% Bonds payable, 10% Total long-term liabilities Total liabilities Stockholders'Equity Preferred $0.90 stock $10 par Common stock, 55 par Retained earnings Total stockholders' equity Total liabilities and stockholders'equity $ 200,000 1,500,000 $1,700,000 $2,600,000 $ 0 1,500,000 $1,500,000 $2,380,000 $ 500,000 500,000 6,180,000 57.180,000 $9,780,000 $ 500,000 500,000 5,375,500 $6,375,000 58,755,000 Next Page