10. Six Measures of Solvency or Profitability The following data were taken from the financial statements of Gates...

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Accounting

10.
Six Measures of Solvency or Profitability
The following data were taken from the financial statements ofGates Inc. for the current fiscal year.
Property, plant, and equipment (net) $2,127,400
Liabilities:
Current liabilities $194,000
Note payable, 6%, due in 15 years 967,000
Total liabilities $1,161,000
Stockholders' equity:
Preferred $4 stock, $100 par (no change during year) $1,161,000
Common stock, $10 par (no change during year) 1,161,000
Retained earnings:
Balance, beginning of year $1,238,000
Net income 451,000 $1,689,000
Preferred dividends $46,440
Common dividends 94,560 141,000
Balance, end of year 1,548,000
Total stockholders' equity $3,870,000
Sales $23,053,500
Interest expense $58,020
Assuming that total assets were $4,779,000 at the beginning ofthe current fiscal year, determine the following. When required,round to one decimal place.
a. Ratio of fixed assets to long-termliabilities
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 %

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4.4 Ratings (962 Votes)

a Ratio of fixed assets to long term liabilties Fixed assets Long term liabilities 2127400 967000 22 b Ratio of liabilities to stockholders equity Liabilities Stockholders equity 1161000 3870000 03 c Ending total assets Ending total liabilities See Answer

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Property, plant, and equipment (net)				$2,127,400
Liabilities:
	Current liabilities		$194,000
	Note payable, 6%, due in 15 years		967,000
	Total liabilities			$1,161,000
Stockholders' equity:
	Preferred $4 stock, $100 par (no change during year)			$1,161,000
	Common stock, $10 par (no change during year)			1,161,000
Retained earnings:
	Balance, beginning of year	$1,238,000
	Net income	451,000	$1,689,000
	Preferred dividends	$46,440
	Common dividends	94,560	141,000
	Balance, end of year			1,548,000
Total stockholders' equity				$3,870,000
Sales				$23,053,500
Interest expense				$58,020

a. Ratio of fixed assets to long-termliabilities
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	%