Six Measures of Solvency or Profitability The following data were taken from the financial statements of...
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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) $2,112,800 Liabilities: Current liabilities Note payable, 5%, due in 15 years Total liabilities $223,000 1,112,000 Stockholders' equity: Preferred $2 stock, $100 par (no change during year) Common stock, $10 par (no change during year) Retained earnings: Balance, beginning of year Net income Preferred dividends Common dividends Balance, end of year 1,068,000 $2,670,000 Total stockholders' equity Sales $12,363,000 Interest expense $66,720 Assuming that long-term investments totaled $2,003,000 throughout the year and that total assets were $3,805,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place a. Ratio ef fixed assets to long-term habilities b. Ratio of abilities to stockholders' equity c. Asset tumover d. Retum on total assets e. Return on stockholders equity f. Return on common stockholders equity $854,000 400,000 $1,254,000 $16,020 169,960 $1,335,000 186,000 $801,000 801,000 0.5 % % 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) $2,112,800 Liabilities: Current liabilities Note payable, 5%, due in 15 years Total liabilities $223,000 1,112,000 Stockholders' equity: Preferred $2 stock, $100 par (no change during year) Common stock, $10 par (no change during year) Retained earnings: Balance, beginning of year Net income Preferred dividends Common dividends Balance, end of year 1,068,000 $2,670,000 Total stockholders' equity Sales $12,363,000 Interest expense $66,720 Assuming that long-term investments totaled $2,003,000 throughout the year and that total assets were $3,805,000 at the beginning of the current fiscal year, determine the following. When required, round to one decimal place a. Ratio ef fixed assets to long-term habilities b. Ratio of abilities to stockholders' equity c. Asset tumover d. Retum on total assets e. Return on stockholders equity f. Return on common stockholders equity $854,000 400,000 $1,254,000 $16,020 169,960 $1,335,000 186,000 $801,000 801,000 0.5 % %
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