1.

Current Position Analysis

The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:

				Current Year			Previous Year
Current assets:
Cash				$395,200			$306,000
Marketable securities				457,600			344,300
Accounts and notes receivable (net)				187,200			114,700
Inventories				686,400			494,100
Prepaid expenses				353,600			315,900
	Total current assets			$2,080,000			$1,575,000
Current liabilities:
Accounts and notes payable
	(short-term)			$301,600			$315,000
Accrued liabilities				218,400			135,000
	Total current liabilities			$520,000			$450,000

a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.

			Current Year			Previous Year
1. Working capital	$			$
2. Current ratio
3. Quick ratio

b. The liquidity of Nilo has ________from the preceding year to the current year. The working capital, current ratio, and quick ratio have all _______ . Most of these changes are the result of an ________ in current assets relative to current liabilities.

2.

Six Measures of Solvency or Profitability

The following data were taken from the financial statements of Gates Inc. for the current fiscal year.

Property, plant, and equipment (net)						$1,608,200
Liabilities:
	Current liabilities			$145,000
	Note payable, 6%, due in 15 years			731,000
	Total liabilities					$876,000
Stockholders' equity:
	Preferred $2 stock, $100 par (no change during year)					$1,314,000
	Common stock, $10 par (no change during year)					1,314,000
Retained earnings:
	Balance, beginning of year	$1,402,000
	Net income	418,000		$1,820,000
	Preferred dividends	$26,280
	Common dividends	41,720		68,000
	Balance, end of year					1,752,000
Total stockholders' equity						$4,380,000
Sales						$25,110,050
Interest expense						$43,860

Assuming that total assets were $4,993,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place.

a. Ratio of fixed assets to long-term liabilities	___
b. Ratio of liabilities to stockholders' equity	___
c. Asset turnover	___
d. Return on total assets	___%
e. Return on stockholders equity	___%
f. Return on common stockholders' equity	___%

3.

Five Measures of Solvency or Profitability

The balance sheet for Garcon Inc. at the end of the current fiscal year indicated the following:

Bonds payable, 9%	$1,900,000
Preferred $5 stock, $100 par	$472,000
Common stock, $6 par	$247,800.00

Income before income tax was $513,000, and income taxes were $76,400 for the current year. Cash dividends paid on common stock during the current year totaled $103,250. The common stock was selling for $100 per share at the end of the year.

Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, if required.

a. Times interest earned ratio		___times
b. Earnings per share on common stock		$____
c. Price-earnings ratio		_____
d. Dividends per share of common stock		$_____
e. Dividend yield		_____%