The comparative financial statements of Blige Inc. are as follows. The market price of Blige Inc. common stock was $63 on December 31, 2012.
Blige Inc. | ||||
Comparative Retained Earnings Statement | ||||
For the Years Ended December 31, 2012 and 2011 | ||||
2012 | 2011 | |||
Retained earnings, January 1 | $1,262,100 | $1,067,600 | ||
Add net income for year | 300,000 | 218,700 | ||
Total | $1,562,100 | $1,286,300 | ||
Deduct dividends: | ||||
On preferred stock | $9,800 | $9,800 | ||
On common stock | 14,400 | 14,400 | ||
Total | $24,200 | $24,200 | ||
Retained earnings, December 31 | $1,537,900 | $1,262,100 |
Blige Inc. | ||||
Comparative Income Statement | ||||
For the Years Ended December 31, 2012 and 2011 | ||||
2012 | 2011 | |||
Sales | $1,787,170 | $1,644,200 | ||
Sales returns and allowances | 8,890 | 5,780 | ||
Net sales | $1,778,280 | $1,638,420 | ||
Cost of goods sold | 613,200 | 564,140 | ||
Gross profit | $1,165,080 | $1,074,280 | ||
Selling expenses | $392,700 | $490,010 | ||
Administrative expenses | 334,530 | 287,790 | ||
Total operating expenses | 727,230 | 777,800 | ||
Income from operations | $437,850 | $296,480 | ||
Other income | 23,050 | 18,920 | ||
$460,900 | $315,400 | |||
Other expense (interest) | 120,000 | 66,400 | ||
Income before income tax | $340,900 | $249,000 | ||
Income tax expense | 40,900 | 30,300 | ||
Net income | $300,000 | $218,700 |
Blige Inc. | |||||
Comparative Balance Sheet | |||||
December 31, 2012 and 2011 | |||||
Dec. 31, 2012 | Dec. 31, 2011 | ||||
Assets | |||||
Current assets: | |||||
Cash | $288,770 | $300,730 | |||
Temporary investments | 437,050 | 498,350 | |||
Accounts receivable (net) | 328,500 | 306,600 | |||
Inventories | 248,200 | 189,800 | |||
Prepaid expenses | 54,632 | 60,150 | |||
Total current assets | $1,357,152 | $1,355,630 | |||
Long-term investments | 754,858 | 195,781 | |||
Property, plant, and equipment (net) | 1,950,000 | 1,755,000 | |||
Total assets | $4,062,010 | $3,306,411 | |||
Liabilities | |||||
Current liabilities | $424,110 | $614,311 | |||
Long-term liabilities: | |||||
Mortgage note payable, 8%, due 2017 | $670,000 | $0 | |||
Bonds payable, 8%, due 2021 | 830,000 | 830,000 | |||
Total long-term liabilities | $1,500,000 | $830,000 | |||
Total liabilities | $1,924,110 | $1,444,311 | |||
Stockholders’ Equity | |||||
Preferred $0.70 stock, $20 par | $280,000 | $280,000 | |||
Common stock, $10 par | 320,000 | 320,000 | |||
Retained earnings | 1,537,900 | 1,262,100 | |||
Total stockholders’ equity | $2,137,900 | $1,862,100 | |||
Total liabilities and stockholders’ equity | $4,062,010 | $3,306,411 |
Instructions:
Determine the following measures for 2012, rounding to one decimal place, except for dollar amounts, which should be rounded to the nearest cent. 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: | ||
6. Inventory turnover: | ||
7. Number of days’ sales in inventory: | ||
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 earned: | ||
12. Ratio of net 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: | % |