Question

Nineteen Measures of Solvency and Profitability The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $63 on December 31, 2016. Blige Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Retained earnings, January 1 $1,421,300 Add net income for year 316,800 $1,212,400 248,300 $1,460,700 $1,738,100 Total Deduct dividends On preferred stock On common stock Total $10,500 28,900 $10,500 28,900 $39,400 $39,400 Retained earnings, December 31 $1,698,700 $1,421,300 Blige Inc. Comparative Income Statement For the Years Ended December 31, 2016 and 2015 2016 Sales 2015 $1,842,600 6,470 $1,836,130 $2,002,860 9,960 $1,992,900 Sales returns and allowances Sales

Answer 1

2016
1) Working Capital:
Total Current Assets (a)	$1,889,481
Total Current Liabilities (b)	$572,570
Working Capital (a - b)	$1,316,911
2) Current Ratio:
Total Current Assets (a)	$1,889,481
Total Current Liabilities (b)	$572,570
Current Ratio (a /b)	3.3
3) Quick Ratio
Total Current Assets	$1,889,481
Less: Inventories	($292,000)
Less: Prepaid expenses	($84,231)
Total Quick Assets (a)	$1,513,250
Total Current Liabilities (b)	$572,570
Quick Ratio (a / b)	2.6
4) Accounts Receivable Turnover:
Net Credit Sales (a)	$1,992,900
Accounts Receivable (net) of 2015 (b)	$372,300
Accounts Receivable (net) of 2016 (c )	$394,200
Average Accounts Receivable (b + c) / 2 (d)	$383,250
Accounts Receivable Turnover (a / d)	5.2
5) Number of days' sales in receivable:
Accounts Receivable (net) of 2016 (a )	$394,200
Net Credit Sales (b)	$1,992,900
Number of days in a year (c )	365 Days
Number of days' sales in receivable (a / b * c)	72	Days
6) Inventory Turnover:
Cost of Goods Sold (a)	$792,050
Inventories of 2015 (b)	$219,000
Inventories of 2016 (c )	$292,000
Average Inventories (b + c)/2 (d)	$255,500
Inventory Turnover (a / d)	3.1
7) Number of days' sales in inventory:
Inventories of 2016 (a)	$292,000
Cost of Goods Sold (b)	$792,050
Number of days in a year (c )	365 Days
Number of days' sales in inventory (a / b * )	135	Days

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