The comparative financial statements of Marshall Inc. are as follows. The market
ID: 2436262 • Letter: T
Question
The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $82.60 on December 31, 20Y2.
Instructions
Determine the following measures for 20Y2 (round to one decimal place, including percentages, except for per-share amounts):
1) Working capital
2) Current ratio
3) Quick ratio
4) Accounts receivable turnover
5) Number of days' sales in receivables
Check Figure: Number of days' sales in receivables, 18.3
6) Inventory turnover
7) Number of days' sales in inventory
8) Ratio of fixed assets to long-term liabilities
9) Ratio of liabilities to stockholders' equity
10) Times interest earned
11) Asset turnover
12) Return on total assets
13) Return on stockholders' equity
14) Return on common stockholders' equity
15) Earnings per share on common stock
16) Price-earnings ratio
17) Dividends per share of common stock
18) Dividend yield
Explanation / Answer
2012 1 Current assets 2464000 Current liabilities 880000 Working capital = Current assets - current liabilities Working capital 1584000 2 Current ratio = Current assets / current liabilities Current ratio 2.8 3 Quick ratio = quick assets / current liabilities Quick assets = current assets - prepaid expense - merchandise inventory Quick assets 1936000 Current liabilities 880000 Acid test ratio 2.2 4 Accounts receivable turnover = net credit sales /Average accounts receivable Net sales 10850000 Beginning accounts receivable 500000 Ending accounts receivable 585000 Average accounts receivable 542500 Accounts receivable turnover 20.0 5 Days sales outstanding = 365 / accounts receivable tunover Days sales outstanding 18.3 Days 6 Inventory turnover = Cost of goods sold / Average inventory Cost of goods sold 6000000 Beginning inventory 380000 Ending inventory 420000 Average inventory 400000 Average inventory = (Beginning + Ending )/2 Inventory turnover 15.0 7 Days sale in inventory = 365 / inventory turnover Days sales in inventory 24 Days