Twenty metrics of liquidity, Solvency, and Profitability
The comparative financial statements of Automotive SolutionsInc. are as follows. The market price of Automotive Solutions Inc.common stock was $66 on December 31, 20Y8.
AUTOMOTIVE SOLUTIONS INC.
Comparative Income Statement
For the Years Ended December 31, 20Y8 and 20Y7 |
| 20Y8 | 20Y7 |
| Sales | $5,409,300 | | $4,983,820 | |
| Cost of goods sold | (2,124,300) | | (1,954,360) | |
| Gross profit | $3,285,000 | | $3,029,460 | |
| Selling expenses | $(1,001,580) | | $(1,264,600) | |
| Administrative expenses | (853,200) | | (742,700) | |
| Total operating expenses | (1,854,780) | | (2,007,300) | |
| Operating income | $1,430,220 | | $1,022,160 | |
| Other revenue and expense: | | | | |
| Other income | 75,280 | | 65,240 | |
| Other expense (interest) | (360,000) | | (198,400) | |
| Income before income tax | $1,145,500 | | $889,000 | |
| Income tax expense | (137,500) | | (107,100) | |
| Net income | $1,008,000 | | $781,900 | |
AUTOMOTIVE SOLUTIONS INC.
Comparative Statement of Stockholders’ Equity
For the Years Ended December 31, 20Y8 and 20Y7 |
| 20Y8 | 20Y7 |
| Preferred
Stock | Common
Stock | Retained
Earnings | Preferred
Stock | Common
Stock | Retained
Earnings |
| Balances, Jan. 1 | | $950,000 | | | $1,080,000 | | | $4,510,450 | | | $950,000 | | | $1,080,000 | | | $3,817,450 | |
| Net income | | | | | | | | 1,008,000 | | | | | | | | | 781,900 | |
| Dividends: | | | | | | | | | | | | | | | | | | |
| Preferred stock | | | | | | | | (13,300) | | | | | | | | | (13,300) | |
| Common stock | | | | | | | | (75,600) | | | | | | | | | (75,600) | |
| Balances, Dec. 31 | | $950,000 | | | $1,080,000 | | | $5,429,550 | | | $950,000 | | | $1,080,000 | | | $4,510,450 | |
AUTOMOTIVE SOLUTIONS INC.
Comparative Balance Sheet
December 31, 20Y8 and 20Y7 |
| Dec. 31,20Y8 | Dec. 31,20Y7 |
| Assets | |
| Current assets: | | |
| Cash | $1,152,130 | | $1,043,070 | |
| Temporary investments | 1,743,770 | | 1,728,520 | |
| Accounts receivable (net) | 1,073,100 | | 1,007,400 | |
| Inventories | 803,000 | | 613,200 | |
| Prepaid expenses | 217,976 | | 208,610 | |
| Total current assets | $4,989,976 | | $4,600,800 | |
| Long-term investments | 2,587,214 | | 1,355,659 | |
| Property, plant, and equipment (net) | 5,850,000 | | 5,265,000 | |
| Total assets | $13,427,190 | | $11,221,459 | |
| Liabilities |
| Current liabilities | $1,467,640 | | $2,201,009 | |
| Long-term liabilities: | | |
| Mortgage note payable, 8%, due in 15 years | $2,020,000 | | $0 | |
| Bonds payable, 8%, due in 20 years | 2,480,000 | | 2,480,000 | |
| Total long-term liabilities | $4,500,000 | | $2,480,000 | |
| Total liabilities | $5,967,640 | | $4,681,009 | |
| Stockholders' Equity | | |
| Preferred $0.70 stock, $50 par | $950,000 | | $950,000 | |
| Common stock, $10 par | 1,080,000 | | 1,080,000 | |
| Retained earnings | 5,429,550 | | 4,510,450 | |
| Total stockholders' equity | $7,459,550 | | $6,540,450 | |
| Total liabilities and stockholders' equity | $13,427,190 | | $11,221,459 | |
Determine the following measures for 20Y8. Round ratio values toone decimal place and dollar amounts to the nearest cent. Fornumber of days' sales in receivables and number of days' sales ininventory, round intermediate calculations to the nearest wholedollar and final amounts to one decimal place. Assume there are 365days in the year.
| 13. Asset turnover | | |
| 14. Return on total assets | | % |
| 15. Return on stockholders’ equity | | % |
| 16. Return on common stockholders’ equity | | % |
| 17. Earnings per share on common stock | $ | |
| 18. Price-earnings ratio | | |
| 19. Dividends per share of common stock | $ | |
| 20. Dividend yield | | % |
