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 $54 on December 31, 20Y8.

AUTOMOTIVE SOLUTIONS INC.

Comparative Income Statement

For the Years Ended December 31, 20Y8 and 20Y7

20Y8 20Y7

Sales $2,715,600 $2,501,970

Cost of goods sold (858,480) (789,800)

Gross profit $1,857,120 $1,712,170

Selling expenses $(684,120) $(824,260)

Administrative expenses (582,770) (484,090)

Total operating expenses (1,266,890) (1,308,350)

Operating income $590,230 $403,820

Other revenue and expense:

Other income 31,070 25,780

Other expense (interest) (184,000) (101,600)

Income before income tax $437,300 $328,000

Income tax expense (52,500) (39,600)

Net income $384,800 $288,400

AUTOMOTIVE SOLUTIONS INC.

Comparative Statement of Stockholders' Equity

For the Years Ended December 31, 20Y8 and 20Y7

20Y8 20Y7

Preferred StockCommon StockRetained EarningsPreferred StockCommon StockRetained

Earnings $360,000$410,000$1,657,150$360,000$410,000$1,407,85

Balances, Jan. 10Net income384,800288,400

Dividends:

Preferred stock(6,300)(6,300)

Common stock(32,800)(32,800)

Balances, Dec. 31$360,000$410,000$2,002,850$360,000$410,000$1,657,150

AUTOMOTIVE SOLUTIONS INC.

Comparative Balance Sheet

December 31, 20Y8 and 20Y7Dec. 31, 20Y8Dec. 31, 20Y7AssetsCurrent assets:Cash$557,890$403,170Temporary investments844,380668,120Accounts receivable (net)467,200438,000Inventories350,400262,800Prepaid expenses105,54980,630Total current assets$2,325,419$1,852,720Long-term investments737,566182,113Property, plant, and equipment (net)2,760,0002,484,000Total assets$5,822,985$4,518,833LiabilitiesCurrent liabilities$750,135$821,683Long-term liabilities:Mortgage note payable, 8%, due in 15 years$1,030,000$0Bonds payable, 8%, due in 20 years1,270,0001,270,000Total long-term liabilities$2,300,000$1,270,000Total liabilities$3,050,135$2,091,683Stockholders' EquityPreferred $0.70 stock, $40 par$360,000$360,000Common stock, $10 par410,000410,000Retained earnings2,002,8501,657,150Total stockholders' equity$2,772,850$2,427,150Total liabilities and stockholders' equity$5,822,985$4,518,833

Instructions:

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%