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Please help and show working. Thank You! Six Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc.
Please help and show working. Thank You!
Six Measures of Solvency or Profitability The following data were taken from the financial statements of Gates Inc. for the current fiscal year.
Property, plant, and equipment (net) | $1,455,400 | |||||
Liabilities: | ||||||
Current liabilities | $152,000 | |||||
Note payable, 6%, due in 15 years | 766,000 | |||||
Total liabilities | $918,000 | |||||
Stockholders' equity: | ||||||
Preferred $2 stock, $100 par (no change during year) | $1,377,000 | |||||
Common stock, $10 par (no change during year) | 1,377,000 | |||||
Retained earnings: | ||||||
Balance, beginning of year | $1,468,000 | |||||
Net income | 576,000 | $2,044,000 | ||||
Preferred dividends | $27,540 | |||||
Common dividends | 180,460 | 208,000 | ||||
Balance, end of year | 1,836,000 | |||||
Total stockholders' equity | $4,590,000 | |||||
Sales | $25,241,350 | |||||
Interest expense | $45,960 |
Assuming that total assets were $5,233,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place.
a. Ratio of fixed assets to long-term liabilities 1.9 b. Ratio of liabilities to stockholders' equity 0.2 5.9 C. Asset turnover d. Return on total assets 19.0 13.2 X % X % e. Return on stockholders' equity [ f. Return on common stockholders' equity 5.9 X % Feedback Check My Work a. Divide property, plant, and equipment (net) by long-term liabilities b. Divide total liabilities by total stockholders'equity c. Divide sales by average total assets. Average total assets = (Beginning total assets + Ending total assets) = 2. To find ending total assets, use the accounting equation and substitute ending liabilities + stockholders' equity for the amount d. Divide the sum of net income plus interest expense by average total assets. Average total assets = (Beginning total assets + Ending total assets) = 2. To find ending total assets, use the accounting equation and substitute ending liabilities + stockholders equity for the amount. e. Divide net income by average total stockholders'equity. Average total stockholders'equity = (Beginning total stockholders'equity + Ending total stockholders'equity) = 2. f. Divide net income minus preferred dividends by average common stockholders'equity. Common stockholders'equity = Common stock + Retained earnings. Average common stockholderslequity = (Beginning common stockholders'equity + Ending common stockholders'equity) = 2
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