Question

1. Measures of liquidity, The ability of a company to make its periodic interest payments and repay the face amount of debt at maturity.Solvency, and The ability of a firm to generate earnings.Profitability

   The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 57 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			$4,485,650		$3,778,950
   Net income			1,036,000		774,000
   Total			$5,521,650		$4,552,950
   Dividends:
   	On preferred stock		$13,300		$13,300
   	On common stock		54,000		54,000
   		Total dividends	$67,300		$67,300
   Retained earnings, December 31			$5,454,350		$4,485,650

   Marshall Inc.
   Comparative Income Statement
   For the Years Ended December 31, 20Y2 and 20Y1
   	20Y2		20Y1
   Sales	$6,948,870		$6,402,320
   Cost of goods sold	2,434,550		2,239,790
   Gross profit	$4,514,320		$4,162,530
   Selling expenses	$1,575,230		$1,936,870
   Administrative expenses	1,341,860		1,137,520
   Total operating expenses	$2,917,090		$3,074,390
   Income from operations	$1,597,230		$1,088,140
   Other revenue	84,070		69,460
   	$1,681,300		$1,157,600
   Other expense (interest)	504,000		277,600
   Income before income tax	$1,177,300		$880,000
   Income tax expense	141,300		106,000
   Net income	$1,036,000		$774,000

   Marshall Inc.
   Comparative Balance Sheet
   December 31, 20Y2 and 20Y1
   			20Y2		20Y1
   Assets
   Current assets
   	Cash		$1,472,720		$986,510
   	Marketable securities		2,228,970		1,634,790
   	Accounts receivable (net)		1,255,600		1,182,600
   	Inventories		949,000		730,000
   	Prepaid expenses		278,622		197,300
   		Total current assets	$6,184,912		$4,731,200
   Long-term investments			2,602,223		571,302
   Property, plant, and equipment (net)			6,930,000		6,237,000
   Total assets			$15,717,135		$11,539,502
   Liabilities
   Current liabilities			$1,932,785		$1,553,852
   Long-term liabilities:
   	Mortgage note payable, 8%		$2,830,000		$0
   	Bonds payable, 8%		3,470,000		3,470,000
   		Total long-term liabilities	$6,300,000		$3,470,000
   Total liabilities			$8,232,785		$5,023,852
   Stockholders' Equity
   Preferred $0.70 stock, $50 par			$950,000		$950,000
   Common stock, $10 par			1,080,000		1,080,000
   Retained earnings			5,454,350		4,485,650
   Total stockholders' equity			$7,484,350		$6,515,650
   Total liabilities and stockholders' equity			$15,717,135		$11,539,502

   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. The excess of the current assets of a business over its current liabilities.Working capital	$
   2. A financial ratio that is computed by dividing current assets by current liabilities.Current ratio
   3. A financial ratio that measures the ability to pay current liabilities with quick assets (cash, temporary investments, accounts receivable), computed as quick assets divided by current liabilities.Quick ratio
   4. The relationship between sales and accounts receivable, computed by dividing the sales by the average net accounts receivable; measures how frequently during the year the accounts receivable are being converted to cash.Accounts receivable turnover
   5. The relationship between sales and accounts receivable, computed by dividing the average accounts receivable by the average daily sales.Number of days' sales in receivables		days
   6. The relationship between the volume of goods sold and inventory, computed by dividing the cost of goods sold by the average inventory.Inventory turnover
   7. The relationship between the volume of sales and inventory, computed by dividing average inventory by the average daily cost of goods sold.Number of days' sales in inventory		days
   8. A solvency ratio that measures how much fixed assets a company has to support its long-term debt.Ratio of fixed assets to long-term liabilities
   9. A comprehensive leverage ratio that measures the relationship of the claims of creditors to stockholders' equity, calculated as total liabilities divided by total stockholders' equity.Ratio of liabilities to stockholders' equity
   10. A ratio that measures the risk that interest payments will not be made if earnings decrease, calculated as income before income tax and interest expense divided by interest expense.Times interest earned
   11. Ratio that measures how effectively a business uses its assets to generate revenues, computed as sales divided by average total assets.Asset turnover
   12. A measure of the profitability of assets, without regard to the equity of creditors and stockholders in the assets.Return on total assets		%
   13. A measure of profitability computed by dividing net income by average total stockholders’ equity.Return on stockholders’ equity		%
   14. A measure of profitability computed by dividing net income, reduced by preferred dividend requirements, by average common stockholders' equity.Return on common stockholders’ equity		%
   15. The profitability ratio of net income available to common shareholders to the number of common shares outstanding.Earnings per share on common stock	$
   16. The ratio of the market price per share of common stock, at a specific date, to the annual earnings per share.Price-earnings ratio
   17. Measures the extent to which earnings are being distributed to common shareholders.Dividends per share of common stock	$
   18. A ratio, computed by dividing the annual dividends paid per share of common stock by the market price per share at a specific date, that indicates the rate of return to stockholders in terms of cash dividend distributions.Dividend yield		%

Answer 1

According to the HOMEWORKLIB RULES we can answer first 4 question but for you I solved 8. If you have any query ask in comment section. If you like my work plz rate. And if you want another to be answered plz post as another question. Thanks