PR 14-4B Nineteen measures of solvency and profitability OBJ. 2, 3 The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel Inc. common stock was $119.70 on December 31, 2016. Stargel Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 $5,375,000 900,000 $6,275,000 $4,545,000 925,000 $5,470,000 Retained earnings, January 1.. Add net income for year... Total .......... Deduct dividends: On preferred stock... On common stock. ... Total.... Retained earnings, December 31 .... $ 45,000 50,000 $ 95,000 $6,180,000 $ 45,000 50,000 $ 95,000 $5,375,000 . . orative Income Statement the Years Ended D Ended December 31, 2016 and 2015 2016 Sales ......... $10,000,000 Cost of goods sold... 5,350,000 Gross profit ................. $ 4,650,000 Selling expenses ................ $ 2,000,000 Administrative expenses... 1,500,000 Total operating expenses ........ $ 3,500,000 Income from operations ......... 1,150,000 Other income........ 150,000 $ 1,300,000 Other expense (interest) ....... 170,000 Income before income tax .. $ 1,130,000 Income tax expense. 230,000 Net income... $ 900.000 2015 $9,400,000 4950,000 $4,450,000 $1,880,000 1.410,000 $3,290,000 $1,160,000 140,000 $1,300,000 150,000 $1,150,000 225.000 $ 925.000 till , Comparative Balance She December 31, 2016 and 2019 31, 2016 Dec. 31. 2015 Current assets: Cash.... . Marketable securities ... Accounts receivable (net). Inventories......... Prepaid expenses.... Total current assets.. Long-term investments.. Property, plant, and equipment inet) Total assets $ 500,000 1,010,000 740,000 1,190,000 250,000 $3,690,000 2350,000 3740,000 59.780,000 $ 400.000 1,000,000 510,000 950,000 229,000 $3,089,000 2,300,000 3,366,000 $8.755.000 $ 900,000 $ 880,000 $ 200,000 1.500,000 $1.700,000 1,500,000 $1,500,000 52,380,000 $2600,000 Current liabilities...... Long-term liabilities: Mortgage note payable 8.8%, due 2021 Bonds payable, 9% due 2017.. Total long-term liabilities Total liabilities ... Stockholders' Equity Preferred 50.90 stock, $10 par... Common stock, 55 par....... Retained earnings.. . Total stockholders' equity.... Total liabilities and stockholders equity $ 500,000 500,000 180,000 $7180,000 39 780.000 $ 500,000 500,000 5.375.000 $6,375,000 $8.755.000 Instructions Determine the following measures for 2016, tounding to one decimal place, except per share amounts, which should be rounded to the nearest penny: 1 Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables 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. Number of times interest charges are earned 11. Number of times preferred dividends are earned 12. Ratio of sales to assets 13. Rate earned on total assets 14. Rate earned on stockholders' equity 15. Rate earned on common stockholders' equity 16. Earnings per share on common stock 17. Price-earings ratio 18. Dividends per share of common stock 19. Dividend yield . 11 In 1 Current 11 U inil !! 11 !! ! ULI U U UU UUU Number of 11 Numbo 11 Emigre Pr. 15(14)-4B
