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 $ 65 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 20Y2 and 20Y1 2012 20Y1 Retained earnings, January 1 $3,187,400 760,000 Net income $2,691,000 551,200 $3,242,200 Total $3,947,400 Dividends: On preferred stock $11,900 $11,900 On common stock 42,900 42,900 $54,800 Total dividends $54,800 $3,892,600 Retained earnings, December 31 $3,187,400 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 2041 Check My Workmanobook Alor unor romaining Previous

Answer 1

	Marshall Inc.
	Year	20Y2
1)	Working Capital=Current Assets-Current Liabilities
	Total Current Assets=(A)	$                                                             31,42,656.00
	Total Current Liabilities=(B)	$                                                               9,82,080.00
	Working Capital=(A)-(B)	$                                                             21,60,576.00
2)	Total Current Assets=(A)	$                                                             31,42,656.00
	Total Current Liabilities=(B)	$                                                               9,82,080.00
	Current Ratio=Current Assets/Current Liabilities=(A)/(B)	3.20
3)	Quick Ratio=(Total Current Assets-Inventory-Prepaid Expenses)/Current Liabilities	($3142656-$584000-$124936)/$982080
		2.478
4)	Accounts Receivable Turnover=Credit Sales/Average Accounts Receivable
	Credit Sales=(A)	$                                                             41,35,450.00
	Beginning Accounts Receivable	$                                                               7,30,000.00
	Ending Accounts Receivable	$                                                               7,73,800.00
	Average Accounts Receivable=(Beginning Accounts Receivable+Ending Accounts Receivable)/2=(B)	$                                                               7,51,900.00
	Accounts Receivable Turnover=(A)/(B)	5.50	Times
5)	Number of days sales in receivables=365/Accounts Receivable Turnover=(365/5.50)	66.36	Days
6)	Days Sales in Inventory=365/Inventory turnover ratio
	Cost of goods sold=(A)	$                                                             15,54,900.00
	Average Inventory=(Beginning Inventory+Ending Inventory)/2
	Beginning Inventory	$                                                               4,52,600.00
	Ending Inventory	$                                                               5,84,000.00
	Average Inventory=(B)=($452600+$584000)/2	$                                                               5,18,300.00
	Inventory Turnover=(A)/(B)	3.00	Times
7)	Days Sales in Inventory=(365/Inventory Turnover)=(365/3)	121.67	Days
8)	Fixed Assets to long term liabilities
	Fixed Assets	$                                                             36,30,000.00
	Long Term Liabilities	$                                                             33,00,000.00
	(Fixed Assets/Long Term liabilities)=($3630000/$3300000)	1.1
9)	Ratio of liabilities to stockholder's equity
	Total Liabilities=(A)	$                                                             42,82,080.00
	Stockholder's Equity=(B)	$                                                             53,52,600.00
	Total Liabilities/Stockholder's Equity=(A)/(B)	0.80
10)	Times Interest Earned=EBIT/Interest
	EBIT=(A)/(B)	$                                                             11,27,600.00
	Interest	$                                                               2,64,000.00
	Times Interest Earned=(A)/(B)	4.27	Times