Calculate the leverage ratio which includes total debt to total assets ratio, equity multiplier, debt to equity ratio, current liabilities to total debt ratio, interest coverage, and fixed charges coverage.
Calculate the leverage ratio which includes total debt to total assets ratio, equity multiplier, debt to equity ratio, current liabilities to total debt ratio, interest coverage, and fixed charges coverage.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Calculate the leverage ratio which includes total debt to total assets ratio, equity multiplier, debt to equity ratio, current liabilities to total debt ratio, interest coverage, and fixed charges coverage.
Transcribed Image Text:2019
2020
Net sales
COGS
Gross profit
Operating expenses
Depreciation
375.000 $
450.000
$
-225.000 $
-270.000
150.000 $
180.000
-46.000 $
-46.000
$
-25.000 $
-30.000
Interest
-4.000 $
-4.000
EBIT
75.000 $
100.000
Income taxes
-20.000 $
-30.000
Net income
$
55.000 $
70.000
Cash dividends
17.000 $
20.000
Transcribed Image Text:2019
2020
Cash
Account receivables
Inventories
Total current assets
Gross fixed assets
Accumulated depreciation
Net fixed assets
Total Assets
$
39.000 $
16.000
$
50.000 $
80.000
151.000 $
204.000
240.000 $
300.000
$
200.000 $
290.000
$
-95.000 $
-125.000
$
105.000 $
165.000
$
345.000 $
465.000
Accounts Payable
Bank loan
Accrued liabilities
Total current liabilities
Long term debt
30.000 $
45.000
$
20.000 $
27.000
$
10.000 $
23.000
60.000 $
15.000 $
95.000
15.000
Common stock
$
85.000 $
120.000
Retained earnings
Total liabilities and equity
185.000 $
235.000
$
345.000 $
465.000
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