Nineteen Measures of Solvency and Profitability The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $62 on December 31, 2016. Blige Inc. Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Retained earnings, January 1 $3,074,900 $2,593,500 Add net income for year 720,000 531,200 Total $3,794,900 $3,124,700 Deduct dividends On preferred stock $9,100 $9,100 On common stock 40,700 40,700 Total $49,800 $49,800 Retained earnings, December 31 $3,745,100 $3,074,900 Blige Inc. Comparative Income Statement For the Years Ended December 31, 2016 and 2015 2016 2015 Sales $4,620,165 $4,250,600 Sales returns and allowances 22,990 14,940 Sales $4,597,175 $4,235,660 Cost of goods sold 1,651,260 1,519,160 Gross profit $2,945,915 $2,716,500 Selling expenses $994,590 $1,241,430 Administrative expenses 847,235 729,090 Total operating expenses 1,841,825 1,970,520 Income from operations $1,104,090 $745,980 Other income 58,110 47,620 $1,162,200 $793,600 Other expense (interest) 344,000 189,600 Income before income tax $818,200 $604,000 Income tax expense 98,200 72,800 Net income $720,000 $531,200 Blige Inc. Comparative Balance Sheet December 31, 2016 and 2015 Dec. 31, 2016 Dec. 31, 2015 Assets Current assets Cash $890,650 $746,260 Temporary investments 1,348,010 1,236,650 Accounts receivable (net) 861,400 810,300 Inventories 642,400 496,400 Prepaid expenses 168,509 149,250 Total current assets $3,910,969 $3,438,860 Long-term investments 1,712,741 304,601 Property, plant, and equipment (net) 5,160,000 4,644,000 Total assets $10,783,710 $8,387,461 Liabilities Current liabilities $1,348,610 $1,552,561 Long-term liabilities Mortgage note payable, 8%, due 2021 $1,930,000 $0 Bonds payable, 8%, due 2017 2,370,000 2,370,000 Total long-term liabilities $4,300,000 $2,370,000 Total liabilities $5,648,610 $3,922,561 Stockholders' Equity Preferred $0.7 stock, $50 par $650,000 $650,000 Common stock, $10 par 740,000 740,000 Retained earnings 3,745,100 3,074,900 Total stockholders' equity $5,135,100 $4,464,900 Total liabilities and stockholders' equity $10,783,710 $8,387,461 Required: Determine the following measures for 2016, 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. 1. Working capital $ 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables days 6. Inventory turnover 7. Number of days' sales in inventory days 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders' equity 10. Number of times interest charges are earned 11. Number of times preferred dividends are earned 12. Ratio of sales to assets 13. Rate earned on total assets % 14. Rate earned on stockholders' equity % 15. Rate earned on common stockholders' equity % 16. Earnings per share on common stock $ 17. Price-earnings ratio 18. Dividends per share of common stock $ 19. Dividend yield %

Answer rating: 100% (QA)

1 Working capital 27841730 2 Current ratio 33 3 Quick ratio 27 4 Accounts receivable turnover 52 5 Number of days sales in receivables 723 days 6 Inve... View the full answer