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 $61 on December 31, 2018 AUTOMOTIVE SOLUTIONS INC. Comparative Income Statement For the Years Ended December 31, 2018 and 2017 2018 2017 Sales $3,294,855 $3,035,690 Cost of goods sold (1,199,390) (1,103,440) Gross profit $2,095,465 $1,932,250 Selling expenses $(729,000) $(903,450) Administrative expenses (621,005) (530,600) Total operating expenses (1,350,005) (1,434,050) Operating income $745,450 $498,200 Other revenue and expense: Other income 39,240 31,800 Other expense Interest) (232,000) (128,000) Income before income tax $552,700 $402,000 Income tax expense (66,300) (48,300) Net Income $486,400 $353,700 AUTOMOTIVE SOLUTIONS INC. Comparative Statement of Stockholders' Equity For the Years Ended December 31, 2018 and 2017 2018 2017 Common Stock $500,000 Retained Earnings $2,038,150 486,400 Preferred Stock $440,000 Common Stock $500,000 Retained Earnings $1,727,150 353,700 Preferred Stock Balances, Jan. 1 $440,000 Net income Dividends: Preferred stock Common stock Balances, Dec. 31 $440,000 (7,700) (35,000) $2,481,850 (7,700) (35,000) $2,038,150 $500.000 $440,000 $500,000 AUTOMOTIVE SOLUTIONS INC Comparative Balance Sheet December 31, 2018 and 2017 Dec 31, 2018 Dec 31, 2017 Assets Current assets: $679,550 1,028,500 576,700 438,000 128,566 $2,851,316 564,569 3,770,000 $7,185,885 $536,600 389,210 540,200 335,800 107,320 $2,409,130 73,803 3,393,000 $5,875,933 $864,035 $1,297,783 Temporary investments Accounts receivable (net) Inventories Prepaid expenses Total current assets Long-term investments Property, plant, and equipment (net) Total assets Liabilities Current liabilities Long-term liabilities: Mortgage note payable, 8%, due in 15 years Bonds payable, 8%, due in 20 years Total long-term liabilities Total liabilities Stockholders' Equity Preferred $0.70 stock, 540 par Common stock, $10 par Retained earings Total stockholders' equity Total liabilities and stockholders' equity $1,300,000 1,600,000 $2,900,000 $3,764,035 $0 1,600,000 $1,600,000 $2,897,783 $440,000 500,000 2,481,850 $3,421,850 $7,185,885 $440,000 500,000 2,038,150 $2,978,150 $5,875,933 Instructions: Determine the following measures for 2018. 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. 1,987,281 61.9 days 117.7 days X % 52.3 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Days' sales in receivables 6. Inventory tumover 7. Deys sales in inventory 8. Debt ratio 9. Ratio of liabilities to stockholders' equity 10. Ratio of fixed assets to long-term liabilities 11. Times interest earned 12. Times preferred dividends earned 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-eamings ratio 19. Dividends per share of common stock 20. Dividend yield ********** X times Xtimes XXX

Answer 1

Debt ratio :T co's assets to Nid debt. Dentration 111oy. Times Interest coloure debt obligat income. Times Into - its meet its preferred die measur HON This indicate of of Retarnon cominon stockholders caniny to that are provided by mealun succes of a coin, generating income for benefit of to = Total Liabilitice Common stockholdes. Tolai Aasa -$3764099 -Metincome - Preferred dividend $342.1990 Avmage common stockhol don's.oquity 648 6400 - 47700 Interat eamed. This ratio is 2460,000 reagure of cos ability to meet its +97150 obligations based on in amnt $216.000 = 17.361 +Dep. Avage Common stock shi equity Dome Interest Anderage total at eauity - Aurorage = $745460 I prefered stockhol den eruity 232000 * $ 3421890+2378108) 16466004 firmy earned = 3. 21 times 93200000 - $440000 = 27.60,000 EPS on Common stock Net income - preferred dividond - weighted average common shares Dluldend Der ghore outstand = 9:57 = $486400 - $7700 152 4 = $62.14 times 50,000 Shares - Asset turnover - This measures = $9.57 price coming Patio in heps to efficiency of a cosuse of its ralucing co that measury its assets in gonerating sales seronue Cument Shase price to EPS or sales income to company = monket price per shore = Net sales horniny per share Average Total assets [beginnin Assets +Ending Assets] = $3294, 855 Dividend por share of Common stock $5875932 $7185885 it is sum of declared dividend by $3299995 $3294.855 co per ordinary shany ols. $1306181812 = $6530909 - Dividend OGY = $0.951 no otgh (Common stock) Times Intert forned = 3. Times Preferred dividend Eamed S measures a co's ability to e Preferred dividend payments to shatchaday : Earning per ghore 957 = 9.57 - 8 7700 - 0.154 Return on total assets !- meosures aco's earning before ant ) taxes releative to its tofen net assets. - EBIT P. 500do Dividend yield exprosed as y. of cumant share price = Dividend for pariod mancat price pershave O: 154 $61 = 0.25% Average Total assets [ beginning Asselst Ending Arsen) 2. & 552700 $ 55-270 = 8.4 81. = & S875936+87 185805

Answer 2

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