Measures of liquidity, Solvency and Profitability The comparative financial stat

Question

Measures of liquidity,  Solvency and  Profitability

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 56 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 $ 2,720,100 $ 2,295,000 Net income 604,800 470,100 Total $3,324,900 $ 2,765,100 Dividends: On preferred stock $ 9,800 $ 9,800 On common stock 35,200 35,200 Total dividends $ 45,000 $ 45,000 Retained earnings, December 31 $ 3,279,900 $ 2,720,100

Explanation / Answer

1) Working capital = 2828544-883920 = 1944624

2) Current ratio = 2828544/883920 = 3.2 : 1

3) Quick ratio = (630610+954430+642400)/883920 = 2.5:1

4) Account receivable turnover :

Average receivable = (642400+605900/2) = 624150

Account receivable turnover = 3370410/624150 = 5.4 Times

5) Number of days' sales in receivables = 365/5.4 = 67.6 Days

Note : Please post whole question in group of 4-4 requirement as per chegg policy

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