Please show all workings Measures of liquidity, Solvency and Profitability The c

Question

Please show all workings

Measures of liquidity, Solvency and Profitability

The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall common stock was $ 51 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 $ 3,227,150 $ 2,740,250 Net income 700,000 561,200 Total $3,927,150 $ 3,301,450 Dividends: On preferred stock $ 11,900 $ 11,900 On common stock 62,400 62,400 Total dividends $ 74,300 $ 74,300 Retained earnings, December 31 $ 3,852,850 $ 3,227,150

Explanation / Answer

1)working capital =current asset -current liabilities

          = 4017321-1181565

          = $ 2,835,756

2)current ratio = current asset /current liabilities

     = 4017321/1181565

       = 3.4

3)Quick ratio = [current asset - Inventory -prepaid expense ]/current liabilities

          = [4017321-598600-182581]/1181565

            = 3236140/1181565

           = 2.7

4)Accounts receivable turnover =Net credit sales /average receivable

              = 4708500 / 784750

               = 6 times

**average receivable = [Ending receivable +beginning receivable ]/2

                       =[810300+759200]/2

                         = 784750

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.