EXERCISE 1-6 use the two attachments provided toCompare the long-term risk and capital structure positions of the company at the end of 2006 and 2005 by computing the total debt ratio and times interest earned.Comment on these ratio results EXERCISE 1-5Evaluating Short-TermLiquidityRefer to the information in Exercise 1-3 about Mixon Company. The company's income state-ments for the years ended December 31, 2006 and 2005 show the following:2006Sales ....Cost of goods soldOther operating expensesInterest expenseIncome taxesTotal costs and expensesNet incomeEarnings per share$410,225208,55011,1008,525$672,500(638,400)$ 34,100$2.10$344,500133,98012,3007,8452005$530,000(498,625)$ 31,375$1.93 Mixon Company's year-end balance sheets show the following:CashAccounts receivable, netMerchandise inventoryPrepaid expenses..Plant assets, netTotal assetsAccounts payable...Long-term notes payable securedby mortgages on plant assets .......Common stock, $10 par valueRetained earnings.Total liabilities and equity2006$ 30,80088,500111,5002005$ 35,62562,50082,5009,7009,375277,500255,000$518,000 $445,000$128,900$ 75,25097,500162,500129,100$518,000102,500162,500104,750$445,0002004$36.80049,20053,0004,000229,500$372,500$ 49,25082.500162,50078,250$372,500EXERCISE 1-3Evaluating Short-TermLiquidity

Formula : Total Debt Ratio = Total Debt/Total Assets 2006 2007 2008 Accounts…

EXERCISE 1-6 use the two attachments provided to Compare the long-term risk and capital structure positions of the company at the end of 2006 and 2005 by computing the total debt ratio and times interest earned. Comment on these ratio results

EXERCISE 1-6 use the two attachments provided to Compare the long-term risk and capital structure positions of the company at the end of 2006 and 2005 by computing the total debt ratio and times interest earned. Comment on these ratio results

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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