Question
The comparative financial statements of Bettancort Inc. are as follows. The market price of Bettancort Inc. common stock was $71.25 on December 31, 2016. Bettancort
The comparative financial statements of Bettancort Inc. are as follows. The market price of Bettancort Inc. common stock was $71.25 on December 31, 2016.
Bettancort Inc.Comparative Retained Earnings StatementFor the Years Ended December 31, 2016 and 201520162015Retained earnings, January 1$2,655,000$2,400,000Add net income for year300,000280,000Total$2,955,000$2,680,000Deduct dividends:On preferred stock$15,000$15,000On common stock10,00010,000Total$25,000$25,000Retained earnings, December 31$2,930,000$2,655,000
Bettancort Inc.Comparative Income StatementFor the Years Ended December 31, 2016 and 201520162015Sales (all on account)$1,212,000$1,010,000Sales returns and allowances12,00010,000Sales$1,200,000$1,000,000Cost of goods sold500,000475,000Gross profit$700,000$525,000Selling expenses$240,000$200,000Administrative expenses180,000150,000Total operating expenses$420,000$350,000Income from operations$280,000$175,000Other income166,000225,000$446,000$400,000Other expense (interest)66,00060,000Income before income tax$380,000$340,000Income tax expense80,00060,000Net income$300,000$280,000
Bettancort Inc.Comparative Balance SheetDecember 31, 2016 and 2015Dec. 31, 2016Dec. 31, 2015AssetsCurrent assets:Cash$450,000$400,000Marketable securities300,000260,000Accounts receivable (net)130,000110,000Inventories67,00058,000Prepaid expenses153,000139,000Total current assets$1,100,000$967,000Long-term investments2,350,0002,200,000Property, plant, and equipment (net)1,320,0001,188,000Total assets$4,770,000$4,355,000LiabilitiesCurrent liabilities$440,000$400,000Long-term liabilities:Mortgage note payable, 8%, due 2021$100,000$0Bonds payable, 5%, due 20171,000,0001,000,000Total long-term liabilities$1,100,000$1,000,000Total liabilities$1,540,000$1,400,000Stockholders' EquityPreferred $0.75 stock, $10 par$200,000$200,000Common stock, $10 par100,000100,000Retained earnings2,930,0002,655,000Total stockholders' equity$3,230,000$2,955,000Total liabilities and stockholders' equity$4,770,000$4,355,000
Required:
Determine the following measures for 2016, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.
1.Working capital$2.Current ratio3.Quick ratio4.Accounts receivable turnover5.Number of days' sales in receivablesdays6.Inventory turnover7.Number of days' sales in inventorydays8.Ratio of fixed assets to long-term liabilities9.Ratio of liabilities to stockholders' equity10.Number of times interest charges are earned11.Number of times preferred dividends are earned12.Ratio of sales to assets13.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-earnings ratio18.Dividends per share of common stock$19.Dividend yield%
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