Question

Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 57 on December 31, 2072. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2012 and 2041 2012 2011 Retained earnings, January 1 $3,584,925 Net Income 840,000 $3,033,475 621,300 $3,654,775 Total $4,424,925 Dividends: On preferred stock On common stock Total dividends $13,300 56,550 $69,850 $4,355,075 $13,300 56,550 $69,850 $3,584,925 Retained earnings, December 31 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 2012 and 2011 2012 $5,321,700 1,817,700 $3,504,000 2011 Sales $4,903, 100 Cost of goods sold 1,672,280 Gross profit $3,230,820

Answer 1

1)	Calculation of Working capital
	Working capital	=	Current Assets- Current liabilties
	Current Assets	=	3,988,361
	Current Liabilties	=	1,286,568
	Working capital	=	2,701,793
2)	Calculation of Current ratio
	Current ratio	=	Current Assets
			Current liabilites
		=	3,988,361
			1,286,568
		=	3.1
3)	Calculation of Quick Ratio
	Quick Ratio	=	Current Assets- Inventory- Prepaid expense
			Current liabilites
		=	3988361- 686200- 167281
			1,286,568
		=	3134880
			1,286,568
		=	2.44
4)	Calculation of Accounts recievable turnover
	Accounts recievable turnover	=	Net sales
			Average Accounts recievable
		=	5321700
			(912500+ 861400)/2
		=	5321700
			886950
		=	6
	As per HomeworkLib policy, only first 4 subparts need to be solved