Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 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 $3,704,000    $3,264,000  Net income 600,000    550,000  Dividends:           On preferred stock (10,000)   (10,000)     On common stock (100,000)   (100,000) Retained earnings, December 31 $4,194,000    $3,704,000    Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 20Y1   20Y2   20Y1 Sales $10,850,000   $10,000,000 Cost of merchandise sold 6,000,000   5,450,000 Gross profit $4,850,000   $4,550,000 Selling expenses $2,170,000   $2,000,000 Administrative expenses 1,627,500   1,500,000 Total operating expenses $3,797,500   $3,500,000 Income from operations $1,052,500   $1,050,000 Other revenue and expense:           Other revenue 99,500   20,000     Other expense (interest) (132,000)   (120,000) Income before income tax expense $1,020,000   $950,000 Income tax expense 420,000   400,000 Net income $600,000   $550,000 Marshall Inc. Comparative Balance Sheet December 31, 20Y2 and 20Y1   20Y2   20Y1 Assets       Current assets:            Cash $1,050,000   $ 950,000      Marketable securities 301,000   420,000      Accounts receivable (net) 585,000   500,000      Inventories 420,000   380,000      Prepaid expenses 108,000   20,000              Total current assets $2,464,000   $2,270,000 Long-term investments 800,000   800,000 Property, plant, and equipment (net) 5,760,000   5,184,000 Total assets $9,024,000   $8,254,000 Liabilities       Current liabilities $880,000   $800,000 Long-term liabilities:            Mortgage note payable, 6% $200,000   $0      Bonds payable, 4% 3,000,000   $3,000,000              Total long-term liabilities $3,200,000   $3,000,000 Total liabilities $4,080,000   $3,800,000 Stockholders’ Equity       Preferred 4% stock, $5 par $250,000   $250,000 Common stock, $5 par 500,000   500,000 Retained earnings 4,194,000   3,704,000 Total stockholders’ equity $4,944,000   $4,454,000 Total liabilities and stockholders’ equity $9,024,000   $8,254,000 Required: Determine the following measures for 20Y2, rounding to one decimal place, except 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 $fill in the blank 1              2.  Current ratio fill in the blank 2              3.  Quick ratio fill in the blank 3

Measures of liquidity, Solvency, and Profitability

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 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 $3,704,000    $3,264,000 
Net income 600,000    550,000 
Dividends:      
    On preferred stock (10,000)   (10,000)
    On common stock (100,000)   (100,000)
Retained earnings, December 31 $4,194,000    $3,704,000 

 

Marshall Inc.
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
  20Y2   20Y1
Sales $10,850,000   $10,000,000
Cost of merchandise sold 6,000,000   5,450,000
Gross profit $4,850,000   $4,550,000
Selling expenses $2,170,000   $2,000,000
Administrative expenses 1,627,500   1,500,000
Total operating expenses $3,797,500   $3,500,000
Income from operations $1,052,500   $1,050,000
Other revenue and expense:      
    Other revenue 99,500   20,000
    Other expense (interest) (132,000)   (120,000)
Income before income tax expense $1,020,000   $950,000
Income tax expense 420,000   400,000
Net income $600,000   $550,000
Marshall Inc.
Comparative Balance Sheet
December 31, 20Y2 and 20Y1
  20Y2   20Y1
Assets      
Current assets:      
     Cash $1,050,000   $ 950,000
     Marketable securities 301,000   420,000
     Accounts receivable (net) 585,000   500,000
     Inventories 420,000   380,000
     Prepaid expenses 108,000   20,000
             Total current assets $2,464,000   $2,270,000
Long-term investments 800,000   800,000
Property, plant, and equipment (net) 5,760,000   5,184,000
Total assets $9,024,000   $8,254,000
Liabilities      
Current liabilities $880,000   $800,000
Long-term liabilities:      
     Mortgage note payable, 6% $200,000   $0
     Bonds payable, 4% 3,000,000   $3,000,000
             Total long-term liabilities $3,200,000   $3,000,000
Total liabilities $4,080,000   $3,800,000
Stockholders’ Equity      
Preferred 4% stock, $5 par $250,000   $250,000
Common stock, $5 par 500,000   500,000
Retained earnings 4,194,000   3,704,000
Total stockholders’ equity $4,944,000   $4,454,000
Total liabilities and stockholders’ equity $9,024,000   $8,254,000

Required:

Determine the following measures for 20Y2, rounding to one decimal place, except 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 $fill in the blank 1             
2.  Current ratio fill in the blank 2             
3.  Quick ratio fill in the blank 3             
4.  Accounts receivable turnover fill in the blank 4             
5.  Number of days’ sales in receivables fill in the blank 5days       
6.  Inventory turnover fill in the blank 6             
7.  Number of days’ sales in inventory fill in the blank 7days       
8.  Ratio of fixed assets to long-term liabilities fill in the blank 8             
9.  Ratio of liabilities to stockholders’ equity fill in the blank 9             
10.  Times interest earned fill in the blank 10             
11.   Asset turnover fill in the blank 11             
12.   Return on total assets fill in the blank 12%          
13.   Return on stockholders’ equity fill in the blank 13%          
14.   Return on common stockholders’ equity fill in the blank 14%          
15.   Earnings per share on common stock $fill in the blank 15             
16.   Price-earnings ratio fill in the blank 16             
17.   Dividends per share of common stock $fill in the blank 17             
18.   Dividend yield fill in the blank 18%        
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