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) $1,558,400 Liabilities: Current liabilities $196,000 Note payable, 6%, due in 15 years 974,000 Total liabilities $1,170,000 $702,000 Stockholders' equity: Preferred $4 stock, $100 par (no change during year) Common stock, $10 par (no change during year) Retained earnings: Balance, beginning of year 702,000 $748,000 353,000 $1,101,000 Net income Preferred dividends $28,080 Common dividends 136,920 165,000 Balance, end of year 936,000 Total stockholders' equity $2,340,000 Sales $11,172,250 Interest expense $58,440 Check My Work Chapter 14 Homework (Application) 936,000 Balance, end of year Total stockholders equity $2,340,000 Sales $11,172,250 Interest expense $58,440 Assuming that long-term investments totaled $1,755,000 throughout the year and that total assets were $3,335,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place. a. Ratio of fixed assets to long-term liabilities b. Ratio of Blabilities to stockholders equity 3,510,00 X 1.6 50 X c. Asset turnover d. Return on total assets 12.0 e. Return on stockholders' equity 15.09 X % 1. Return on common stockholders' equity 19.84 X Check My Work a Divide property, plant and equipment (net) by long-term labities b. Divide total abilities by total stockholders equity, e Divide sales by average total assets, excluding long-term investments Average total assets = (Beginning total assets +Ending total assets)+2. To find anding total assets, use the accounting equation and substitue ending labis + stockholders equity for the amount d Divide the sum of net income plus interest expense by average total assets. Average total (Beginning total assets Ending fat assets) Previous Next Check My Work