Reference no: EM131765040

Question: 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 $65 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			$4,248,900		$3,605,400
Add net income for year			937,200		738,500
Total			$5,186,100		$4,343,900
Deduct dividends
	On preferred stock		$12,600		$12,600
	On common stock		82,400		82,400
		Total	$95,000		$95,000
Retained earnings, December 31			$5,091,100		$4,248,900

 

Blige Inc.
Comparative Income Statement
For the Years Ended December 31, 2016 and 2015
	2016		2015
Sales	$6,124,875		$5,634,900
Sales returns and allowances	30,470		19,810
Sales	$6,094,405		$5,615,090
Cost of goods sold	1,982,680		1,824,070
Gross profit	$4,111,725		$3,791,020
Selling expenses	$1,476,990		$1,766,410
Administrative expenses	1,258,185		1,037,420
Total operating expenses	2,735,175		2,803,830
Income from operations	$1,376,550		$987,190
Other income	72,450		63,010
	$1,449,000		$1,050,200
Other expense (interest)	384,000		211,200
Income before income tax	$1,065,000		$839,000
Income tax expense	127,800		100,500
Net income	$937,200		$738,500

Blige Inc.
Comparative Balance Sheet
December 31, 2016 and 2015
			Dec. 31, 2016		Dec. 31, 2015
Assets
Current assets
	Cash		$1,107,030		$847,220
	Temporary investments		1,675,500		1,403,970
	Accounts receivable (net)		1,065,800		1,000,100
	Inventories		803,000		613,200
	Prepaid expenses		209,438		169,440
		Total current assets	$4,860,768		$4,033,930
Long-term investments			2,719,322		620,927
Property, plant, and equipment (net)			5,760,000		5,184,000
Total assets			$13,340,090		$9,838,857
Liabilities
Current liabilities			$1,518,990		$1,019,957
Long-term liabilities
	Mortgage note payable, 8%, due 2021		$2,160,000		$0
	Bonds payable, 8%, due 2017		2,640,000		2,640,000
		Total long-term liabilities	$4,800,000		$2,640,000
Total liabilities			$6,318,990		$3,659,957
Stockholders' Equity
Preferred $0.7 stock, $50 par			$900,000		$900,000
Common stock, $10 par			1,030,000		1,030,000
Retained earnings			5,091,100		4,248,900
	Total stockholders' equity		$7,021,100		$6,178,900
Total liabilities and stockholders' equity			$13,340,090		$9,838,857

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		%