Question

Automotive Solutions Inc. common stock was $65 on December 31, 20Y8.

The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $65 on December 31, 20Y8. AUTOMOTIVE SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 20Y8 and 20Y7
	20Y8		20Y7
Sales	$4,623,455		$4,259,770
Cost of goods sold	(1,655,640)		(1,523,190)
Gross profit	$2,967,815		$2,736,580
Selling expenses	$(986,560)		$(1,230,500)
Administrative expenses	(840,405)		(722,680)
Total operating expenses	(1,826,965)		(1,953,180)
Operating income	$1,140,850		$783,400
Other revenue and expense:
Other income	60,050		50,000
Other expense (interest)	(360,000)		(198,400)
Income before income tax	$840,900		$635,000
Income tax expense	(100,900)		(76,200)
Net income	$740,000		$558,800

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		$680,000			$780,000			$3,209,100			$680,000			$780,000			$2,728,500
Net income								740,000									558,800
Dividends:
Preferred stock								(11,900)									(11,900)
Common stock								(66,300)									(66,300)
Balances, Dec. 31		$680,000			$780,000			$3,870,900			$680,000			$780,000			$3,209,100

AUTOMOTIVE SOLUTIONS INC. Comparative Balance Sheet December 31, 20Y8 and 20Y7
	Dec. 31, 20Y8		Dec. 31, 20Y7
Assets
Current assets:
Cash	$1,135,180		$712,110
Temporary investments	1,718,120		1,180,070
Accounts receivable (net)	897,900		846,800
Inventories	671,600		511,000
Prepaid expenses	214,766		142,420
Total current assets	$4,637,566		$3,392,400
Long-term investments	1,607,324		426,737
Property, plant, and equipment (net)	4,950,000		4,455,000
Total assets	$11,194,890		$8,274,137
Liabilities
Current liabilities	$1,363,990		$1,125,037
Long-term liabilities:
Mortgage note payable, 8%, due in 15 years	$2,020,000		$0
Bonds payable, 8%, due in 20 years	2,480,000		2,480,000
Total long-term liabilities	$4,500,000		$2,480,000
Total liabilities	$5,863,990		$3,605,037
Stockholders' Equity
Preferred $0.70 stock, $40 par	$680,000		$680,000
Common stock, $10 par	780,000		780,000
Retained earnings	3,870,900		3,209,100
Total stockholders' equity	$5,330,900		$4,669,100
Total liabilities and stockholders' equity	$11,194,890		$8,274,137

Need help calculating the following:

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.

13. Asset turnover
14. Return on total assets		%
15. Return on stockholders’ equity		%
16. Return on common stockholders’ equity

Answer 1

Solution 13:

Asset turnover = Sales / Average total assets

Average total assets = ($11,194,890 + $8,274,137)/2 = $9,734,513.50

Sales for 2018 = $4,623,455

Asset turnover ratio = = $4,623,455 / $9,734,513.50 = 0.5

Solution 14:

Return on total assets = Operating income / Average total assets

= $1,140,850 / $9,734,513.50 = 11.7%

Solution 15:

Return on stock holders equity = Net Income / Average stockholder's Equity

Average stockholder's equity = ($5,330,900 + $4,669,100) / 2 = $5,000,000

Net Income for 2018 = $740,000

Return on stockholder equity = $740,000 / $5,000,000 = 14.8%

Solution 16:

Return on common stockholder's Equity = (Net Income - Preference dividend) / Average common shareholder's Equity

Average common shareholder's equity = ($4,650,900 + $3,989,100)/2 = $4,320,000

Return on common stockholder's Equity for 2018 = ($740,000 - $11,900) /$4,320,000 = 16.9%