PR 17-4A Measures of liquidity, solvency, and profitability Obj. 3 - Describe and illustrate how to use financial statement analysis to assess liquidity., 4 - Describe and illustrate how to use financial statement analysis to assess solvency., 5 - Describe and illustrate to to use financial statement analysis to assess profitability. 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 Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 20Y2 $3,704,000 600,000 $4,304,000 20Y1 $3,264,00 550,00 $3,814,00 Retained earnings, January 1 Net income Total ... Dividends: On preferred stock On common stock... Total dividends .... Retained earnings, December 31 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 2041 $ 10,000 100,000 $ 110,000 $4,194,000 $ 10,001 100,00 $ 110,001 $3,704,00 Sales ..... Cost of goods sold. Gross profit.... Selling expenses Administrative expenses. Total operating expenses Income from operations Other income... 20Y2 $10,850,000 6,000,000 $ 4,850,000 $ 2,170,000 1,627,500 $3,797,500 $ 1,052,500 99,500 $ 1,152,000 132,000 $ 1,020,000 420,000 $ 600,000 20Y1 $10,000,00 5,450,001 $ 4,550,00 $ 2,000,00 1,500,000 $ 3,500,00 $ 1,050,001 20,00 $ 1,070,00 120,001 $ 950,00 400,00 $ 550,001 Other expense (interest).. Income before income tax Income tax expense.. Net income... Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1 20Y2 20Y1 $1,050,000 301,000 585,000 420,000 108,000 $ 2,464,000 800,000 5,760,000 $ 9,024,000 $ 950,00 420,00 500,00 380,000 20,00 $2,270,00 800,00 5,184,001 $8,254,00 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 Liabilities Current liabilities... Long-term liabilities: Mortgage note payable, 6% Bonds payable, 4% Total long-term liabilities Total liabilities Stockholders' Equity Preferred 4% stock, $5 par Common stock, $5 par. Retained earnings... Total stockholders' equity.. $ 880,000 $ 800,00 $ 200,000 3,000,000 $3,200,000 $ 4,080,000 $ 3,000,00 $3,000,00 $3,800,00 $ 250,000 500,000 4,194,000 $ 4,944,000 $ 250,00 500,00 3,704,00 $4,454,00 Total liabilities and stockholders' equity. $ 9,024,000 $8,254,001 Instructions Determine the following measures for 20Y2, rounding 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 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