Question

Measures of liquidity, Solvency and Profitability

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall Inc. common stock was $ 66 on December 31, 20Y2.

Marshall Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 20Y2 and 20Y1
			20Y2		20Y1
Retained earnings, January 1			$ 1,646,350		$ 1,385,350
Net income			390,000		283,700
Total			$ 1,990,950		$ 1,669,050
Dividends
	On preferred stock		$ 6,300		$ 6,300
	On common stock		16,400		16,400
		Total dividends	$ 22,700		$ 22,700
Retained earnings, December 31			$ 2,013,650		$ 1,646,350

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2		20Y1
Sales	$ 2,579,820		$ 2,376,910
Cost of goods sold	950,460		874,420
Gross profit	$ 1,629,360		$ 1,502,490
Selling expenses	$ 558,100		$ 695,720
Administrative expenses	475,420		408,590
Total operating expenses	1,033,520		1,104,310
Income from operations	$ 595,840		$ 398,180
Other income	31,360		25,420
	$ 627,200		$ 423,600
Other expense (interest)	184,000		101,600
Income before income tax	$ 443,200		$ 322,000
Income tax expense	53,200		38,300
Net income	$ 390,000		$ 283,700

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
			Dec. 31, 20Y2		Dec. 31, 20Y1
Assets
Current assets
	Cash		$ 515,130		$ 386,740
	Marketable securities		779,660		640,890
	Accounts receivable (net)		467,200		438,000
	Inventories		350,400		262,800
	Prepaid expenses		97,454		77,350
		Total current assets	$ 2,209,844		$ 1,805,780
Long-term investments			1,105,821		321,555
Property, plant, and equipment (net)			2,530,000		2,277,000
Total assets			$ 5,845,665		$ 4,404,335
Liabilities
Current liabilities			$ 762,015		$ 717,985
Long-term liabilities
	Mortgage note payable, 8 %		$ 1,030,000		$ 0
	Bonds payable, 8 %		1,270,000		1,270,000
		Total long-term liabilities	$ 2,300,000		$ 1,270,000
Total liabilities			$ 3,062,015		$ 1,987,985
Stockholders' Equity
Preferred $ 0.70 stock, $ 40 par			$ 360,000		$ 360,000
Common stock, $ 10 par			410,000		410,000
Retained earnings			2,013,650		1,646,350
	Total stockholders' equity		$ 2,783,650		$ 2,416,350
Total liabilities and stockholders' equity			$ 5,845,665		$ 4,404,335

Required:

Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.

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

Answer 1