Question

eBook Calculator Measures of liquidity, Solvency, and Profitability The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 68 on December 31, 20Y2. Marshall Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2012 and 2041 2012 2011 Retained earnings, January 1 $3,605,800 817,600 $3,033,600 621,400 Net Income Dividends: On preferred stock (10,500) On common stock (10,500) (38,700) $4,374,200 (38,700) $3,605,800 Retained earnings, December 31 Marshall Inc. Comparative Income Statement For the Years Ended December 31, 20Y2 and 2041 2012 2011 Sales $5,575,740 2,014,800 Cost of merchandise sold Gross profit Selling expenses Administrative expenses $3,560,940 $1,241,080 1,057,220 $5,137,180 1,853,620 $3,283,560 $1,520,270 892,850 Check My Work Save and Exit Submit Assignment for Gradine

Answer 1

No	Particulars	Ratios
1	Working capital	= Current assets-Current liabilities = $4,906,122 - $1,582,620 = $3,323,502
2	Current ratio	= Current assets/Current liabilities = $4,906,122 / $1,582,620 = 3.1 : 1
3	Quick ratio	Quick assets=Current Assets (-)Inventory(-)Prepaid Expense = $4,906,122 - $7,59,200 - $2,19,772 = $39,27,150 Quick ratio= Quick assets/Current liabilities = $39,27,150 / $1,582,620 = 2.5 : 1
4	Accounts receivable turnover	Average account receivable= $(1,007,400+949,000)/2 = $9,78,200 Accounts receivable turnover= Net sales/Average account receivable = $5,575,740/$9,78,200 = 5.7
5	Number of days' sales in receivables	= 365/Accounts receivable turnover = 365/5.7 = 64 days
6	Inventory turnover ratio	Average inventory= $(7,59,200+5,84,000)/2= $6,71,600 Inventory turnover ratio= Cost of goods sold/Average inventory = $20,14,800/$6,71,600 = 3
7	Number of days' sales in inventory	= 365/Inventory turnover ratio = 365 / 3 =121.7 Days
8	Ratio of fixed assets to long term liabilities	= Total fixed assets/Long term liabilities = $5,500,000 / 5,000,000 = 1.1
9	Ratio of liabilities to shareholders' equity	= Total liabilities/Shareholders' equity = $6,582,620 / $5,984,200 = 1.1
10	Time interest earned	EBIT =Income before income tax+Interest expense =9,29,100+400,000 =$13,29,100 = EBIT/Interest expense = $13,29,100 / $400,000 = 3.3
11	Asset turnover	Average total assets= $(12,566,820+8,983,622)/2= $10,775,221 Asset turnover= Net sales/Average total assets = $5,575,740 / $10,775,221 = 0.5 Times
12	Return on total assets	= Net income*100 / Average total assets = $8,17,600 *100 / $10,775,221 = 7.6%
13	Return on stockholders' equity	Average stockholders' equity= $(5,984,200+5,215,800)/2= $5,600,000 Return on stockholders' equity= Net income * 100/Average stockholders' equity = $8,17,600 * 100 / $5,600,000 = 14.6%
14	Return on common stockholders' equity	Average common stockholders' equity= $(860,000+43,74,200+860,000+36,05,800)/2= $4,850,000 Return on common stockholders' equity = (Net income-Preferred dividend)*100 / Average common stockholders' equity = $(8,17,600 -10,500)*100 / $4,850,000 = 16.6%
15	Earning per share on common stock	= (Net income-Preferred dividend)/Weighted average shares outstanding = $(8,17,600 -10,500)/86,000 = $9.38
16	Price-earning ratio	= Market price per share/Earning price per share = $68 / $9.38 = 7.2
17	Dividend per share of common stock	= Dividend on common stock/Common shares outstanding = $38,700 / 86,000 = $0.45
18	Dividend yield ratio	= Dividend per share*100/Market price per share = $0.45*100/68 = 0.7%