Homework SourseMeasures of liquidity Solvency and Profitability The compara
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 $ 71 on December 31, 20Y2.
Required:
Determine the following measures for 20Y2, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. Use the rounded answer of the requirement for subsequent requirement, if required. Assume 365 days a year.
| Marshall Inc. | ||||||
| Comparative Retained Earnings Statement | ||||||
| For the Years Ended December 31, 20Y2 and 20Y1 | ||||||
| 20Y2 | 20Y1 | |||||
| Retained earnings, January 1 | $ 2,461,325 | $ 2,069,975 | ||||
| Net income | 570,000 | 424,000 | ||||
| Total | $ 2,966,025 | $ 2,493,975 | ||||
| Dividends | ||||||
| On preferred stock | $ 7,000 | $ 7,000 | ||||
| On common stock | 25,650 | 25,650 | ||||
| Total dividends | $ 32,650 | $ 32,650 | ||||
| Retained earnings, December 31 | $ 2,998,675 | $ 2,461,325 |
Solution
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Workings:
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Workings:
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| Inventory Turnover | Cost of Goods Sold/ Average Inventory* | 1312540/452600 | 2.9 | times |
