Question

Measures of liquidity, Solvency and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall Inc. common stock was $ 68 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 $ 1,190,000 $ 1,407,900 330,000 Net income 243,700 Total $ 1,737,900 $ 1,433,700 Dividends $ 10,500 $ 10,500 15,300 15,300 On preferred stock On common stock Total dividends Retained earnings, December 31 $ 25,800 $ 25,800 $ 1,712,100 $ 1,407,900

Answer 1

Answer

Working capital	$ 1,292,082
Current Ratio	3.2
Quick Ratio	2.6
Account Receivables Turnover Ratio	5.5

Calculations:

	Particulars	Amount
A	Current assets	$ 1,879,392
B	Current liablites	$     587,310
A-B	Working capital	$ 1,292,082
	Particulars	Amount
A	Current assets	$ 1,879,392
B	Current liablites	$     587,310
A/B	Current Ratio	3.2
	Particulars	Amount
A	Quick assets (Current Assets - Prepaid expense - Inventory)	$ 1,503,870
B	Current liabilities	$     587,310
A/B	Quick Ratio	2.6
	Particulars	Amount
A	Credit Sales	$ 2,107,875
B	Average Debtors	$     383,250
A/B	Account Receiveables Turnover Ratio	5.5

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