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 $ 63 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			$ 2,062,350		$ 1,755,450
Net income			448,000		359,600
Total			$2,510,350		$ 2,115,050
Dividends:
	On preferred stock		$ 7,700		$ 7,700
	On common stock		45,000		45,000
		Total dividends	$ 52,700		$ 52,700
Retained earnings, December 31			$ 2,457,650		$ 2,062,350

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
	20Y2		20Y1
Sales	$ 3,086,440		$ 2,843,670
Cost of goods sold	1,116,900		1,027,550
Gross profit	$ 1,969,540		$ 1,816,120
Selling expenses	$ 687,470		$ 828,990
Administrative expenses	585,630		486,860
Total operating expenses	$1,273,100		$1,315,850
Income from operations	$ 696,440		$ 500,270
Other revenue	36,660		31,930
	$ 733,100		$ 532,200
Other expense (interest)	224,000		123,200
Income before income tax	$ 509,100		$ 409,000
Income tax expense	61,100		49,400
Net income	$ 448,000		$ 359,600

Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
			20Y2		20Y1
Assets
Current assets
	Cash		$ 811,930		$ 414,700
	Marketable securities		1,228,870		687,210
	Accounts receivable (net)		569,400		532,900
	Inventories		423,400		321,200
	Prepaid expenses		153,611		82,940
		Total current assets	$ 3,187,211		$ 2,038,950
Long-term investments			867,854		162,093
Property, plant, and equipment (net)			3,080,000		2,772,000
Total assets			$ 7,135,065		$ 4,973,043
Liabilities
Current liabilities			$ 937,415		$ 430,693
Long-term liabilities:
	Mortgage note payable, 8%		$ 1,260,000		$ 0
	Bonds payable, 8%		1,540,000		1,540,000
		Total long-term liabilities	$ 2,800,000		$ 1,540,000
Total liabilities			$ 3,737,415		$ 1,970,693
Stockholders' Equity
Preferred $0.70 stock, $40 par			$ 440,000		$ 440,000
Common stock, $10 par			500,000		500,000
Retained earnings			2,457,650		2,062,350
Total stockholders' equity			$ 3,397,650		$ 3,002,350
Total liabilities and stockholders' equity			$ 7,135,065		$ 4,973,043

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