Twenty metrics of liquidity,Solvency, andProfitability

The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $51 on December 31, 20Y8.

AUTOMOTIVE SOLUTIONS INC.

Comparative Income Statement

For the Years Ended December 31, 20Y8 and 20Y720Y820Y7Sales$6,918,210$6,374,120Cost of goods sold(2,452,800)(2,256,580)Gross profit$4,465,410$4,117,540Selling expenses$(1,545,120)$(1,862,440)Administrative expenses(1,316,220)(1,093,820)Total operating expenses(2,861,340)(2,956,260)Operating income$1,604,070$1,161,280Other revenue and expense:Other income84,43074,120Other expense (interest)(528,000)(290,400)Income before income tax$1,160,500$945,000Income tax expense(139,300)(113,700)Net income$1,021,200$831,300

AUTOMOTIVE SOLUTIONS INC.

Comparative Statement of Stockholders' Equity

For the Years Ended December 31, 20Y8 and 20Y720Y820Y7Preferred

StockCommon

StockRetained

EarningsPreferred

StockCommon

StockRetained

EarningsBalances, Jan. 1$1,000,000$1,140,000$4,796,300$1,000,000$1,140,000$4,058,800Net income1,021,200831,300Dividends:Preferred stock(14,000)(14,000)Common stock(79,800)(79,800)Balances, Dec. 31$1,000,000$1,140,000$5,723,700$1,000,000$1,140,000$4,796,300

AUTOMOTIVE SOLUTIONS INC.

Comparative Balance Sheet

December 31, 20Y8 and 20Y7Dec. 31, 20Y8Dec. 31, 20Y7AssetsCurrent assets:Cash$1,343,510$935,790Temporary investments2,033,4201,550,750Accounts receivable (net)1,321,3001,241,000Inventories992,800759,200Prepaid expenses254,173187,160Total current assets$5,945,203$4,673,900Long-term investments1,988,567-996,156Property, plant, and equipment (net)8,580,0007,722,000Total assets$16,513,770$11,399,744LiabilitiesCurrent liabilities$2,050,070$833,444Long-term liabilities:Mortgage note payable, 8%, due in 15 years$2,970,000$0Bonds payable, 8%, due in 20 years3,630,0003,630,000Total long-term liabilities$6,600,000$3,630,000Total liabilities$8,650,070$4,463,444Stockholders' EquityPreferred $0.70 stock, $50 par$1,000,000$1,000,000Common stock, $10 par1,140,0001,140,000Retained earnings5,723,7004,796,300Total stockholders' equity$7,863,700$6,936,300Total liabilities and stockholders' equity$16,513,770$11,399,744

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$2.Current ratio3.Quick ratio4.Accounts receivable turnover5.Days' sales in receivablesdays6.Inventory turnover7.Days' sales in inventorydays8.Debt ratio%9.Ratio of liabilities to stockholders' equity10.Ratio of fixed assets to long-term liabilities11.Times interest earnedtimes12.Times preferred dividends earnedtimes13.Asset turnover14.Return on total assets%15.Return on stockholders' equity%16.Return on common stockholders' equity%17.Earnings per share on common stock$18.Price-earnings ratio19.Dividends per share of common stock$20.Dividend yield%