E10-10 (Algo) Calculating and Interpreting the Debt-to-Assets Ratio and Times Interest Earned Ratio [LO 10-5] At May 31, 2022, Tagalong Transport Services reported the following amounts (in millions) in its financial statements: Total Assets Total Liabilities Interest Expense Income Tax Expense 2022 $ 56,000 2021 $ 54,000 29,120 25,920 606 540 115 220 570 4,410 Net Income Required: 1. Compute the debt-to-assets ratio and times interest earned ratio for 2022 and 2021. 2-a. In 2022, were creditors providing a higher (or lower) proportion of financing for Tagalong's assets? 2-b. In 2022, was Tagalong more (or less) successful at covering its interest costs, as compared to 2021? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Compute the debt-to-assets ratio and times interest earned ratio for 2022 and 2021. Note: Round your answers to 2 decimal places. Debt-to-Assets Times Interest Earned Ratio 2022 2021
E10-10 (Algo) Calculating and Interpreting the Debt-to-Assets Ratio and Times Interest Earned Ratio [LO 10-5] At May 31, 2022, Tagalong Transport Services reported the following amounts (in millions) in its financial statements: Total Assets Total Liabilities Interest Expense Income Tax Expense 2022 $ 56,000 2021 $ 54,000 29,120 25,920 606 540 115 220 570 4,410 Net Income Required: 1. Compute the debt-to-assets ratio and times interest earned ratio for 2022 and 2021. 2-a. In 2022, were creditors providing a higher (or lower) proportion of financing for Tagalong's assets? 2-b. In 2022, was Tagalong more (or less) successful at covering its interest costs, as compared to 2021? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Compute the debt-to-assets ratio and times interest earned ratio for 2022 and 2021. Note: Round your answers to 2 decimal places. Debt-to-Assets Times Interest Earned Ratio 2022 2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![E10-10 (Algo) Calculating and Interpreting the Debt-to-Assets Ratio and Times Interest Earned Ratio [LO
10-5]
At May 31, 2022, Tagalong Transport Services reported the following amounts (in millions) in its financial statements:
Total Assets
Total Liabilities
Interest Expense
Income Tax Expense
2022
$ 56,000
2021
$ 54,000
29,120
25,920
606
540
115
220
570
4,410
Net Income
Required:
1. Compute the debt-to-assets ratio and times interest earned ratio for 2022 and 2021.
2-a. In 2022, were creditors providing a higher (or lower) proportion of financing for Tagalong's assets?
2-b. In 2022, was Tagalong more (or less) successful at covering its interest costs, as compared to 2021?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A
Req 2B
Compute the debt-to-assets ratio and times interest earned ratio for 2022 and 2021.
Note: Round your answers to 2 decimal places.
Debt-to-Assets
Times Interest Earned Ratio
2022
2021](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe9b55e08-3d73-4909-b341-12faa451818f%2F68668255-73f5-4e3a-b940-7a221dccf23a%2Fnkqaj2s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:E10-10 (Algo) Calculating and Interpreting the Debt-to-Assets Ratio and Times Interest Earned Ratio [LO
10-5]
At May 31, 2022, Tagalong Transport Services reported the following amounts (in millions) in its financial statements:
Total Assets
Total Liabilities
Interest Expense
Income Tax Expense
2022
$ 56,000
2021
$ 54,000
29,120
25,920
606
540
115
220
570
4,410
Net Income
Required:
1. Compute the debt-to-assets ratio and times interest earned ratio for 2022 and 2021.
2-a. In 2022, were creditors providing a higher (or lower) proportion of financing for Tagalong's assets?
2-b. In 2022, was Tagalong more (or less) successful at covering its interest costs, as compared to 2021?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A
Req 2B
Compute the debt-to-assets ratio and times interest earned ratio for 2022 and 2021.
Note: Round your answers to 2 decimal places.
Debt-to-Assets
Times Interest Earned Ratio
2022
2021
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