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Expertise:

Algebra,Applied Sciences See all

Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all

Teaching Since:	May 2017
Last Sign in:	401 Weeks Ago, 4 Days Ago
Questions Answered:	66690
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Education

MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011

Experience

Professor
Phoniex University
Oct-2001 - Nov-2016

Category > Accounting Posted 19 Aug 2017 My Price 14.00

Stargel Inc.

Nineteen measures of solvency and profitability

The comparative financial statements of Stargel Inc. are as follows. The market price of Stargel Inc. common stock was $119.70 on December 31, 2016.

Stargel Inc.

Comparative Retained Earnings Statement For the Years Ended December 31, 2016 and 2015

	2016	2015
Retained earnings, January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$5,375,000	$4,545,000
Add net income for year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	900,000	925,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deduct dividends:	$6,275,000	$5,470,000
On preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 45,000	$ 45,000
On common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	50,000	50,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 95,000	$ 95,000
Retained earnings, December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$6,180,000	$5,375,000

Stargel Inc.

Comparative Income Statement

For the Years Ended December 31, 2016 and 2015

	2016	2015
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$10,000,000	$9,400,000
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,350,000	4,950,000
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 4,650,000	$4,450,000
Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 2,000,000	$1,880,000
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,500,000	1,410,000
Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 3,500,000	$3,290,000
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 1,150,000	$1,160,000
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	150,000	140,000
	$ 1,300,000	$1,300,000
Other expense (interest) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	170,000	150,000
Income before income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 1,130,000	$1,150,000
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	230,000	225,000
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 900,000	$ 925,000

Current assets:

Q53

Stargel Inc.

Comparative Balance Sheet December 31, 2016 and 2015

Assets

Dec. 31, 2016 Dec. 31, 2015

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 500,000 $ 400,000

Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,010,000 1,000,000

Accounts receivable (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 740,000 510,000

Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,190,000 950,000

Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000 229,000

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,690,000 $3,089,000

Long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,350,000 2,300,000

Property, plant, and equipment (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,740,000 3,366,000 Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,780,000 $8,755,000

Liabilities

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 900,000 $ 880,000 Long-term liabilities:

Mortgage note payable, 8 .8%, due 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 200,000 $ 0

Bonds payable, 9%, due 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,500,000

Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,700,000 $1,500,000

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,600,000 $2,380,000

Stockholders’ Equity

Preferred $0 .90 stock, $10 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 500,000	$ 500,000
Common stock, $5 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	500,000	500,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6,180,000	5,375,000
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$7,180,000	$6,375,000
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$9,780,000	$8,755,000

Instructions

Determine the following measures for 2016, rounding to one decimal place, except per- share amounts, which should be rounded to the nearest penny:

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 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

Answers

Maurice Tutor

(5)

Status NEW Posted 19 Aug 2017 11:08 PM My Price 14.00

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Stargel Inc.

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