Question

Six Measures of Solvency or Profitability

The following data were taken from the financial statements of Olvideo Enterprises Inc. for the current fiscal year.

Property, plant, and equipment (net)						$1,173,200
Liabilities:
	Current liabilities			$167,000
	Mortgage note payable, 8%, issued 2005, due 2021			838,000
	Total liabilities					$1,005,000
Stockholders' equity:
	Preferred $2 stock, $100 par (no change during year)					$1,005,000
	Common stock, $10 par (no change during year)					1,005,000
Retained earnings:
	Balance, beginning of year	$1,072,000
	Net income	391,000		$1,463,000
	Preferred dividends	$20,100
	Common dividends	102,900		123,000
	Balance, end of year					1,340,000
Total stockholders' equity						$3,350,000
Sales						$13,442,000
Interest expense						$67,040

Assuming that long-term investments totaled $2,178,000 throughout the year and that total assets were $4,137,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place.

a. Ratio of fixed assets to long-term liabilities
b. Ratio of liabilities to stockholders' equity
c. Ratio of sales to assets
d. Rate earned on total assets	%
e. Rate earned on stockholders' equity	%
f. Rate earned on common stockholders' equity	%

Answer 1