PR 14-4A Measures of liquidity, solvency, and profitability Obj. 3, Obj. 4, 5 The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2. EXCEL TEMPLATE Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 2041 2012 $3.704,000 600,000 $4,304,000 20Y1 $3,264,000 550,000 $3,814,000 Retained earnings, January 1. Net income Total .. Dividends: On preferred stock On common stock... Total dividends ... Retained earnings. December 31 $ 10,000 100,000 $ 110,000 $4,194,000 $ 10,000 100,000 $ 110,000 $3,704,000 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 20Y1 2012 Sales ..... $10,850,000 Cost of goods sold... 6,000,000 Gross profit ... $ 4.850,000 Selling expenses........ $ 2,170,000 Administrative expenses. 1,627,500 Total operating expenses... $ 3.797,500 Income from operations ...... $ 1.052,500 Other income... 99,500 $ 1,152,000 Other expense (interest)..... Income before income tax.. $ 1.020,000 Income tax expense.. 420,000 Net income.. $ 600,000 20Y1 $10,000,000 5,450,000 $4.550.000 $2,000,000 1,500,000 $3,500,000 $ 1,050,000 20,000 5 1,070,000 120,000 $ 950,000 400,000 $ 550,000 Marshall Inc. Comparative Balance Sheet December 31, 2012 and 2011 2012 2011 $1,050,000 301.000 585,000 420,000 108,000 $ 2,464,000 800,000 5,760.000 $9,024,000 $950,000 420,000 500,000 380,000 20.000 $2,270,000 800,000 5.184,000 $8.254,000 Assets Current assets: Cash ... Marketable securities. Accounts receivable (net) Inventories.. Prepaid expenses. Total current assets. Long-term investments .. Property, plant, and equipment (net) Total assets .... Liabilitie Current liabilities. Long-term liabilities: Mortgage note payable, 6%, Bonds payable, 4%, Total long-term liabilities Total liabilities Stockholders' Equity Preferred 4% stock, 55 par... Common stock, 55 par.. . Retained earnings... Total stockholders' equity..** ** Total liabilities and stockholders' equity... $ 880.000 $ 800,000 $ 200,000 3,000,000 $ 3.200.000 $4,080,000 $ 0 3,000,000 $3.000.000 $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 Instructions Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts): 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables Answer Check Figure: Number of days' sales in receivables, 18.3 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
