PR 14-4B Measures of liquidity, solvency and profitability Obj. 3,4,5 9. Ratio of liabilities The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel to stockholders' common stock was $119.70 on December 31, 20Y2. equity, 0.4 Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 2041 20Y2 20Y1 EXCEL TEMPLATE Retained earnings, January 1.. $5,375,000 $4,545,000 Net income.. 900,000 925,000 Total .... $6,275,000 $5,470,000 Dividends: On preferred stock On common stock. $ 45,000 $ 45,000 Total dividends... 50,000 50,000 Retained earnings, December 31... $ 95,000 $ 95,000 S6,180,000 $5,375,000 Chapter 14 Fra Statement Analysis Starguline For the Year Ended December 31, 2012 and 2011 Comparative Income Statement 2011 $9.400.000 Cost of goods sold... Gross profit Selling expenses Administrative expenses...... Total operating expenses.. Income from operations .. Other income... $10,000,000 5.350.000 54650.000 $ 2.000.000 1.500.000 $ 3.500.000 $ 1,150,000 150.000 $ 1,300,000 170,000 $ 1,130.000 $4,450,000 $1 880,000 1410.000 $3.290.000 51,160,000 140,000 $1,300,000 150.000 51.150.000 Other expense interest) income before income tax Income tax expense... Net Income $ 900.000 $ 925,000 Comparative Balance December 31, 2012 and 2041 $ 500.000 1,010,000 740,000 1,190,000 250.000 $3,690,000 2,350,000 3.740.000 $9,780,000 $400,000 1,000,000 510.000 950,000 229,000 $3,089,000 2,300,000 3,366,000 $8755,000 Current assets: Cash.. . .......... Marketable securities ..... Accounts receivable net)..... Inventories.. Prepaid expenses... . Total current assets...... Long-term investments Property, plant, and equipment (net) Total assets 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.... $ 900.000 $ 880,000 $ 200,000 1.500,000 $1,700,000 $2,600,000 5 0 1.500.000 $1,500,000 $2,380,000 $ 500,000 500,000 6,180,000 $7,180,000 $9,780,000 $500,000 500,000 5,375,000 $6,375.000 $8,755,000 . 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 6. Inventory turnover (Continued) Chapter 14 Financial Statement Analysis 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
