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The comparative financial statements of Bettancort Inc. are as follows. The market price of Bettancort Inc. common stock was $71.25 on December 31, 2016.

Bettancort Inc.
Comparative Retained Earnings Statement
For the Years Ended December 31, 2016 and 2015
     2016    2015
Retained earnings, January 1$2,655,000 $2,400,000 
Add net income for year300,000 280,000 
Total$2,955,000 $2,680,000 
Deduct dividends:    
 On preferred stock$15,000 $15,000 
 On common stock10,000 10,000 
  Total$25,000 $25,000 
Retained earnings, December 31$2,930,000 $2,655,000 



Bettancort Inc.
Comparative Income Statement
For the Years Ended December 31, 2016 and 2015
     2016    2015
Sales (all on account)$1,212,000 $1,010,000 
Sales returns and allowances12,000 10,000 
Sales$1,200,000 $1,000,000 
Cost of goods sold500,000 475,000 
Gross profit$700,000 $525,000 
Selling expenses$240,000 $200,000 
Administrative expenses180,000 150,000 
Total operating expenses$420,000 $350,000 
Income from operations$280,000 $175,000 
Other income166,000 225,000 
 $446,000 $400,000 
Other expense (interest)66,000 60,000 
Income before income tax$380,000 $340,000 
Income tax expense80,000 60,000 
Net income$300,000 $280,000 



Bettancort Inc.
Comparative Balance Sheet
December 31, 2016 and 2015
     Dec. 31, 2016    Dec. 31, 2015
Assets 
Current assets:  
 Cash$450,000 $400,000 
 Marketable securities300,000 260,000 
 Accounts receivable (net)130,000 110,000 
 Inventories67,000 58,000 
 Prepaid expenses153,000 139,000 
  Total current assets$1,100,000 $967,000 
Long-term investments2,350,000 2,200,000 
Property, plant, and equipment (net)1,320,000 1,188,000 
Total assets$4,770,000 $4,355,000 
Liabilities
Current liabilities$440,000 $400,000 
Long-term liabilities:  
 Mortgage note payable, 8%, due 2021$100,000 $0 
 Bonds payable, 5%, due 20171,000,000 1,000,000 
  Total long-term liabilities$1,100,000 $1,000,000 
Total liabilities$1,540,000 $1,400,000 
Stockholders' Equity  
Preferred $0.75 stock, $10 par$200,000 $200,000 
Common stock, $10 par100,000 100,000 
Retained earnings2,930,000 2,655,000 
 Total stockholders' equity$3,230,000 $2,955,000 
Total liabilities and stockholders' equity$4,770,000 $4,355,000 

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.  The excess of the current assets of a business over its current liabilities.Working capital$[removed][removed] 
2.  A financial ratio that is computed by dividing current assets by current liabilities.Current ratio[removed][removed] 
3.  A financial ratio that measures the ability to pay current liabilities with quick assets (cash, marketable securities, accounts receivable).Quick ratio[removed][removed] 
4.  The relationship between sales and accounts receivable, computed by dividing the net sales by the average net accounts receivable; measures how frequently during the year the accounts receivable are being converted to cash.Accounts receivable turnover[removed][removed] 
5.  The relationship between sales and accounts receivable, computed by dividing the average accounts receivable by the average daily sales.Number of days' sales in receivables[removed][removed]days
6.  The relationship between the volume of goods sold and inventory, computed by dividing the cost of goods sold by the average inventory.Inventory turnover[removed][removed] 
7.  The relationship between the volume of sales and inventory, computed by dividing average inventory by the average daily cost of goods sold.Number of days' sales in inventory[removed][removed]days
8.  The ratio of fixed assets to long-term liabilities provides a measure of whether note-holders or bondholders will be paid.Ratio of fixed assets to long-term liabilities[removed][removed] 
9.  The ratio of liabilities to stockholders' equity measures how much of the company is financed by debt and equity.Ratio of liabilities to stockholders' equity[removed][removed] 
10.  A ratio that measures creditor margin of safety for interest payments, calculated as income before income tax + interest expense divided by interest expense.Number of times interest charges are earned[removed][removed] 
11.  A ratio that measures the risk that preferred dividends will not be paid if earnings decrease, calculated by dividing net income by the amount of preferred dividends.Number of times preferred dividends are earned[removed][removed] 
12.  Ratio that measures how effectively a company uses its assets, computed as sales divided by average total assets.Ratio of sales to assets[removed][removed] 
13.  A measure of profitability of assets, without regard to the portion of assets financed by creditors or stockholders.Rate earned on total assets[removed][removed]%
14.  A measure of profitability computed by dividing net income by average stockholders' equity.Rate earned on stockholders' equity[removed][removed]%
15.  A measure of profitability computed by dividing net income, reduced by preferred dividend requirements, by average common stockholders' equity.Rate earned on common stockholders' equity[removed][removed]%
16.  The profitability ratio of net income available to common shareholders to the number of common shares outstanding.Earnings per share on common stock$[removed][removed] 
17.  The ratio of the market price per share of common stock, at a specific date, to the annual earnings per share.Price-earnings ratio[removed][removed] 
18.  Measures the extent to which earnings are being distributed to common shareholders.Dividends per share of common stock$[removed][removed] 
19.  A ratio, computed by dividing the annual dividends paid per share of common stock by the market price per share at a specific date, that indicates the rate of return to stockholders in terms of cash dividend distributions.Dividend yield[removed][removed]%

 

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