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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,

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 Mortgage note payable, 6%, issued 2005, due 2021 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 ________
b. Ratio of liabilities to stockholders' equity _______
c. Ratio of sales to assets _______
d. Rate earned on total assets _______

A measure of profitability of assets, without regard to the portion of assets financed by creditors or stockholders.

__________

%
e. Rate earned on stockholders' equity _______ %
f. Rate earned on common stockholders' equity ______

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