Question

Twenty metrics of liquidity, Solvency, and Profitability

The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $53 on December 31, 20Y8.

AUTOMOTIVE SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 20Y8 and 20Y7
	20Y8		20Y7
Sales	$1,248,300		$1,150,140
Cost of goods sold	(429,240)		(394,900)
Gross profit	$819,060		$755,240
Selling expenses	$(285,370)		$(345,520)
Administrative expenses	(243,090)		(202,920)
Total operating expenses	(528,460)		(548,440)
Operating income	$290,600		$206,800
Other revenue and expense:
Other income	15,300		13,200
Other expense (interest)	(80,000)		(44,000)
Income before income tax	$225,900		$176,000
Income tax expense	(27,100)		(21,500)
Net income	$198,800		$154,500

AUTOMOTIVE SOLUTIONS INC. Comparative Statement of Stockholders’ Equity For the Years Ended December 31, 20Y8 and 20Y7
	20Y8									20Y7
	Preferred Stock			Common Stock			Retained Earnings			Preferred Stock			Common Stock			Retained Earnings
Balances, Jan. 1		$200,000			$230,000			$883,300			$200,000			$230,000			$754,200
Net income								198,800									154,500
Dividends:
Preferred stock								(7,000)									(7,000)
Common stock								(18,400)									(18,400)
Balances, Dec. 31		$200,000			$230,000			$1,056,700			$200,000			$230,000			$883,300

AUTOMOTIVE SOLUTIONS INC. Comparative Balance Sheet December 31, 20Y8 and 20Y7
	Dec. 31, 20Y8		Dec. 31, 20Y7
Assets
Current assets:
Cash	$226,660		$182,670
Temporary investments	343,050		302,710
Accounts receivable (net)	226,300		211,700
Inventories	175,200		131,400
Prepaid expenses	42,880		36,530
Total current assets	$1,014,090		$865,010
Long-term investments	510,640		74,773
Property, plant, and equipment (net)	1,300,000		1,170,000
Total assets	$2,824,730		$2,109,783
Liabilities
Current liabilities	$338,030		$246,483
Long-term liabilities:
Mortgage note payable, 8%, due in 15 years	$450,000		$0
Bonds payable, 8%, due in 20 years	550,000		550,000
Total long-term liabilities	$1,000,000		$550,000
Total liabilities	$1,338,030		$796,483
Stockholders' Equity
Preferred $0.70 stock, $20 par	$200,000		$200,000
Common stock, $10 par	230,000		230,000
Retained earnings	1,056,700		883,300
Total stockholders' equity	$1,486,700		$1,313,300
Total liabilities and stockholders' equity	$2,824,730		$2,109,783

Instructions:

Determine the following measures for 20Y8. Round ratio values to one decimal place and dollar amounts to the nearest cent. For number of days' sales in receivables and number of days' sales in inventory, round intermediate calculations to the nearest whole dollar and final amounts to one decimal place. Assume there are 365 days in the year.

1. Working capital	$
2. Current ratio
3. Quick ratio
4. Accounts receivable turnover
5. Days' sales in receivables		days
6. Inventory turnover
7. Days' sales in inventory		days
8. Debt ratio		%
9. Ratio of liabilities to stockholders' equity
10. Ratio of fixed assets to long-term liabilities
11. Times interest earned		times
12. Times preferred dividends earned		times
13. Asset turnover
14. Return on total assets		%
15. Return on stockholders’ equity		%
16. Return on common stockholders’ equity		%
17. Earnings per share on common stock	$
18. Price-earnings ratio
19. Dividends per share of common stock	$
20. Dividend yield		%

Answer 1

Answers

Working Capital	$ 676,060.
Current Ratio	3.0
Acid Test ratio	2.4
Account Receivables Turnover Ratio	5.7
Number of days' sales in receivables	64.0

Calculations:

	Particulars	20Y2
A	Current assets	$ 1,014,090
B	Current liabilities	$     338,030
A-B	Working Capital	676,060.0
A	Current assets	$ 1,014,090
B	Current liablites	$     338,030
A/B	Current Ratio	3.0
	Particulars	Amount
A	Quick assets (current assets - Prepaid expenses - Inventory)	$     796,010
B	Current liablites	$     338,030
A/B	Acid Test ratio	2.4
	Particulars	Amount
A	Credit Sales	$ 1,248,300
B	Average Debtors (226300+211700)/2	$     219,000
A/B	Account Receivables Turnover Ratio	5.7
	Particulars	Amount
A	365	$            365
B	Account Receivables Turnover Ratio	$                 6
A/B	Number of days' sales in receivables	64.0

**As per HOMEWORKLIB RULES, only first four parts have been answered. Please post the remaining parts as a separate question.**

In case of any doubt, please comment.