Twenty metrics of liquidity, Solvency, and Profitability

The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $66 on December 31, 20Y8.

AUTOMOTIVE SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 20Y8 and 20Y7
	20Y8		20Y7
Sales	$3,016,725		$2,779,500
Cost of goods sold	(1,095,000)		(1,007,400)
Gross profit	$1,921,725		$1,772,100
Selling expenses	$(649,700)		$(792,250)
Administrative expenses	(553,445)		(465,290)
Total operating expenses	(1,203,145)		(1,257,540)
Operating income	$718,580		$514,560
Other revenue and expense:
Other income	37,820		32,840
Other expense (interest)	(200,000)		(110,400)
Income before income tax	$556,400		$437,000
Income tax expense	(66,800)		(52,500)
Net income	$489,600		$384,500

AUTOMOTIVE SOLUTIONS INC. Comparative Statement of Stockholders Equity For the Years Ended December 31, 20Y8 and 20Y7
	20Y8									20Y7
	Preferred Stock			Common Stock			Retained Earnings			Preferred Stock			Common Stock			Retained Earnings
Balances, Jan. 1		$450,000			$510,000			$2,217,475			$450,000			$510,000			$1,877,525
Net income								489,600									384,500
Dividends:
Preferred stock								(6,300)									(6,300)
Common stock								(38,250)									(38,250)
Balances, Dec. 31		$450,000			$510,000			$2,662,525			$450,000			$510,000			$2,217,475

AUTOMOTIVE SOLUTIONS INC. Comparative Balance Sheet December 31, 20Y8 and 20Y7
	Dec. 31, 20Y8		Dec. 31, 20Y7
Assets
Current assets:
Cash	$461,940		$472,510
Temporary investments	699,160		783,020
Accounts receivable (net)	547,500		511,000
Inventories	408,800		321,200
Prepaid expenses	87,392		94,500
Total current assets	$2,204,792		$2,182,230
Long-term investments	1,678,006		440,282
Property, plant, and equipment (net)	3,000,000		2,700,000
Total assets	$6,882,798		$5,322,512
Liabilities
Current liabilities	$760,273		$765,037
Long-term liabilities:
Mortgage note payable, 8%, due in 15 years	$1,120,000		$0
Bonds payable, 8%, due in 20 years	1,380,000		1,380,000
Total long-term liabilities	$2,500,000		$1,380,000
Total liabilities	$3,260,273		$2,145,037
Stockholders' Equity
Preferred $0.70 stock, $50 par	$450,000		$450,000
Common stock, $10 par	510,000		510,000
Retained earnings	2,662,525		2,217,475
Total stockholders' equity	$3,622,525		$3,177,475
Total liabilities and stockholders' equity	$6,882,798		$5,322,512

Instructions:

Determine the following measures for 20Y8. Round ratio values to one decimal place and dollar amounts to the nearest cent. For number of days' sales in receivables and number of days' sales in inventory, round intermediate calculations to the nearest whole dollar and final amounts to one decimal place. Assume there are 365 days in the year.

1. Working capital	$fill in the blank 1
2. Current ratio	fill in the blank 2
3. Quick ratio	fill in the blank 3
4. Accounts receivable turnover	fill in the blank 4
5. Days' sales in receivables	fill in the blank 5	days
6. Inventory turnover	fill in the blank 6
7. Days' sales in inventory	fill in the blank 7	days
8. Debt ratio	fill in the blank 8	%
9. Ratio of liabilities to stockholders' equity	fill in the blank 9
10. Ratio of fixed assets to long-term liabilities	fill in the blank 10
11. Times interest earned	fill in the blank 11	times
12. Times preferred dividends earned	fill in the blank 12	times
13. Asset turnover	fill in the blank 13
14. Return on total assets	fill in the blank 14	%
15. Return on stockholders equity	fill in the blank 15	%
16. Return on common stockholders equity	fill in the blank 16	%
17. Earnings per share on common stock	$fill in the blank 17
18. Price-earnings ratio	fill in the blank 18
19. Dividends per share of common stock	$fill in the blank 19
20. Dividend yield	fill in the blank 20	%

Feedback

1. Subtract current liabilities from current assets. 2. Divide current assets by current liabilities. 3. Divide quick assets by current liabilities. Quick assets are cash, temporary investments, and receivables. 4. Divide net sales by average accounts receivable. Average Accounts receivable = (Beginning Net Accounts Receivable + Ending Net Accounts Receivable) 2 5. Divide average accounts receivable by average daily sales. Average Accounts receivable = (Beginning Net Accounts Receivable + Ending Net Accounts Receivable) 2 Average daily sales are net sales divided by 365 days. 6. Divide cost of goods sold by average inventory. Average Inventory = (Beginning Inventories + Ending Inventories) 2 7. Divide average inventory by average daily cost of goods sold. Average Inventory = (Beginning Inventories + Ending Inventories) 2 Average cost of goods sold are cost of goods sold divided by 365 days. 8. Divide total liabilities by total assets. 9. Divide total liabilities by total stockholders equity. 10. Divide property, plant and equipment (net) by long-term liabilities. 11. Divide the sum of income before income tax plus interest expense by interest expense. 12. Divide net income by preferred dividends [Preferred stock par value x dividend per preferred share]. 13. Divide net sales by average property, plant & equipment, . Average PPE = (Beginning PPE + Ending PPE) 2 14. Divide the sum of net income plus interest expense by average total assets. Average total assets = (Beginning Total Assets + Ending Total Assets) 2 15. Divide net income by average stockholders equity. Average stockholders equity = (Beginning StockholdersEquity + Ending StockholdersEquity) 2 16. Divide net income minus preferred dividends [Preferred stock par value x dividend per preferred share] by average common stockholders equity. Common StockholdersEquity = Common Stock + Retained Earnings Average Common StockholdersEquity = (Beginning Common Stockholders equity + Ending Common StockholdersEquity) 2 17. Divide net income minus preferred dividends [Preferred stock par value x dividend per preferred share] by common shares outstanding (common stock par value). 18. Divide common market share price by common earnings per share (use answer from requirement 17). 19. Divide common dividends (from Statement of Stockholders Equity) by common shares outstanding (common stock par value). 20. Divide common dividends per share (use answer from requirement 19) by market share price.