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)						$3,200,000
Liabilities:
	Current liabilities			$1,000,000
	Note payable, 6%, due in 15 years			2,000,000
	Total liabilities					$3,000,000
Stockholders equity:
	Preferred $10 stock, $100 par (no change during year)					$1,000,000
	Common stock, $10 par (no change during year)					2,000,000
Retained earnings:
	Balance, beginning of year	$1,570,000
	Net income	930,000		$2,500,000
	Preferred dividends	$100,000
	Common dividends	400,000		500,000
	Balance, end of year					2,000,000
Total stockholders equity						$5,000,000
Sales						$18,900,000
Interest expense						$120,000

Assuming that long-term investments totaled $3,000,000 throughout the year and that total assets were $7,000,000 at the beginning of the current fiscal year, determine the following. Round to one decimal place.

a. Ratio of fixed assets to long-term liabilities	1.6
b. Ratio of liabilities to stockholders' equity	0.6
c. Asset turnover	4.2
d. Return on total assets	14 %
e. Return on stockholders equity	%
f. Return on common stockholders equity	%