Question
The following data were taken from the financial statements of Gates Inc for the current fiscal year. Assuming that long-term investments totaled $3,000,000 throughout the
The following data were taken from the financial statements of Gates Inc for the current fiscal year. 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:
Ratio of fixed assets to long term assets
Ratio of liabilities to stockholders' equity
Ratio of sales to assets
Rate earned on total assets
Rate earned on stockholders' equity
Rate earned on common stockholders' equity
Round to one decimal place
Property, plant & 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
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