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Viewing Solutions Inc. - measures of solvency and profitability

Viewing Solutions Inc.
Comparative Retained Earnings Statements
For the Year Ended December 31, 2010 and 2009

Retained earnings, January 1 604,000 306,000
Add net income for year 428,000 314,000
Total 1,032,000 620,000
Deduct dividends:
On preferred stock 4,000 4,000
On common stock 12,000 12,000
Total 16,000 16,000
Retained earnings, December 31 1,016,000 604,000

Viewing Solutions Inc
Comparative Income Statement
For the Year Ended December 31, 2010 and 2009

Sales 1,608,000 1,481,600
Sales return and allowances 5,920 6,000
New Sales 1,602,080 1,475,000
Cost of Goods sold 480,200 499,200
Gross Profit 1,121,880 976,400
Selling Expenses 324,000 352,000
Administrative expenses 234,000 211,200
Total operating expenses 558,000 563,200
Income from operations 563,880 413,200
Other Income 24,000 19,200 587,880 432,400
Other expense (interest) 110,720 80,000
Income before income tax 447,160 352,400
Income tax expense 49,160 38,400
Net Income 428,000 314,000

Viewing Solutions Inc.
Comparative Balance Sheet
December 31, 2010 and 2009

Current Assets
Cash 240,000 162,400
Temporary investments 364,000 328,800
Account Receivable (net) 260,000 211,200
Inventories 208,000 66,400
Prepaid Expenses 44,000 23,200
Total current assets 1,116,000 2,024,000

Long term investments 204,800 320,000
Property, plant and equipment (net) 1,539,200 976,000
Total assets 2,860,000 2,024,000

Liabilities

Current liabilities 360,000 320,000
Long term liabilities
Mortgage note payable, 8%, due 2018 384,000
Bonds payable, 10%, due 2019 800,000 800,000
Total long term liabilities 1,184,000 1,120,000
Total liabilities 1,544,000 1,120,000

Stockholders' equity

Preferred $2.00 stock, $50 par 100,000 100,000
Common stock, $5 par 200,000 200,000
Retained earnings 1,016,000 604,000
Total stockholders' equity 1,316,000 904,000
Total liabilities and stockholders' equity 2,860,000 2,024,000

Determine the following measures for 2010, rounding to one decimal place

1. Working capital
2. Current ratio
3. Quick ratio
4. Account 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 interests charges 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. Earning per share on common stock
17. Price-earnings ratio
18. Dividends per share on common stock
19. Dividend yield

Solution Summary

A measure of solvency and profitability for Viewing Solutions Inc is examined. Comparative retained earnings statements are provided.

$2.19