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 $67 on December 31, 20Y8.
AUTOMOTIVE SOLUTIONS INC. Comparative Balance Sheet December 31, 20YS and 20Y7 Dec. 31, 20Y8 Dec. 31, 20Y7 Assets Current assets: Cash $1,001,780 $518,580 Temporary investments 1,516,200 859,360 Accounts receivable (net) 751,900 708,100 Inventories 569,400 438,000 Prepaid expenses 189,525 103,720 Total current assets $4,028,805 $2,627,760 Long-term investments 925,545 -214,601 Property, plant, and equipment (net) 4,440,000 3,996,000 Total assets $9,394,350 $6,409,159 Liabilities Current liabilities $1,220,850 $442,659 Long-term liabilities: Mortgage note payable, 8%, due in 15 years $1,560,000 $0 Bonds payable, 8%, due in 20 years 2,040,000 2,040,000 Total long-term liabilities $3,700,000 $2,040,000 Total liabilities $4,920,850 $2,482,659 Stockholders' Equity Preferred $0.70 stock, $40 par $560,000 $560,000 Common stock, $10 par 640,000 640,000 Retained earnings 3,273,500 2,726,500 Total stockholders' equity $4,473,500 $3,926,500 Total liabilities and stockholders' equity $9,394,350 $6,409,159AUTOMOTIVE SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 20Y8 and 20Y7 20Y8 20Y7 Sales $4,307,000 $3,968,300 Cost of goods sold (1,410,360) (1,297,530) Gross profit $2,896,640 $2,670,770 Selling expenses $(1,059,760) $(1,267,330) Administrative expenses (902,750) (744,310) Total operating expenses (1,962,510) (2,011,640) Operating income $934,130 $659,130 Other revenue and expense: Other income 49,170 42,070 Other expense (interest) (296,000) (163,200) Income before income tax $687,300 $538,000 Income tax expense (82,500) (64,700) Net income $604,800 $473,300AUTOMOTIVE SOLUTIONS INC. Comparative Statement of Stockholders' Equity For the Years Ended December 31, 20Y8 and 20Y7 20Y8 20Y7 Preferred Common Retained Preferred Common Retained Stock Stock Earnings Stock Stock Earnings Balances, Jan. 1 $560,000 $640,000 $2,726,500 $560,000 $640,000 $2,311,000 Net income 604,800 473,300 Dividends: Preferred stock (9,800) (9,800) Common stock (48,000) (48,000) Balances, Dec. 31 $560,000 $640,000 $3,273,500 $560,000 $640,000 $2,726,500Instructions: 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 2,807,955 2. Current ratio 3.3 3. Quick ratio 2.70 4. Accounts receivable turnover 5. Days' sales in receivables days 6. Inventory turnover 7. Days' sales in inventory days 8. Debt ratio 9. Ratio of liabilities to stockholders' equity 1.1 V 10. Ratio of fixed assets to long-term liabilities 1.2 V 11. Times interest earned times 12. Times preferred dividends earned times 13. Asset turnover X 14. Return on total assets X 15. Return on stockholders' equity X 16. Return on common stockholders' equity 17. Earnings per share on common stock 18. Price- earnings ratio 19. Dividends per share of common stock 20. Dividend yield
