Long-Term Solvency Ratios Summary data from year-end financial statements of Palm Springs Company for the current year follow. Summary Income Statement Data Sales $10, 500, 600 Cost of goods sold 6,050,000 Selling expenses 685,000 Administrative expenses 945,000 Interest expense 783, 500 Income tax expense 427,791 8,891,291 Net income $1,609,309 Summary Balance Sheet Data Cash $84, 700 Total liabilities $749,700 Noncash assets 885,500 Stockholders' equity 220, 500 Total assets $970, 200 Total liabilities and equity $970, 200 Round answers to one decimal place. a. Compute the ratio of times - interest - earned. Answer times b. Compute the debt-to-equity ratio. Answer
Long-Term Solvency Ratios Summary data from year-end financial statements of Palm Springs Company for the current year follow. Summary Income Statement Data Sales $10, 500, 600 Cost of goods sold 6,050,000 Selling expenses 685,000 Administrative expenses 945,000 Interest expense 783, 500 Income tax expense 427,791 8,891,291 Net income $1,609,309 Summary Balance Sheet Data Cash $84, 700 Total liabilities $749,700 Noncash assets 885,500 Stockholders' equity 220, 500 Total assets $970, 200 Total liabilities and equity $970, 200 Round answers to one decimal place. a. Compute the ratio of times - interest - earned. Answer times b. Compute the debt-to-equity ratio. Answer
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PB
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![Long-Term Solvency Ratios Summary data from year-end financial statements of Palm Springs Company for the current
year follow. Summary Income Statement Data Sales $10, 500, 600 Cost of goods sold 6, 050,000 Selling expenses
685,000 Administrative expenses 945,000 Interest expense 783, 500 Income tax expense 427,791 8,891,291 Net
income $1,609,309 Summary Balance Sheet Data Cash $84, 700 Total liabilities $749,700 Noncash assets 885,500
Stockholders' equity 220, 500 Total assets $970, 200 Total liabilities and equity $970, 200 Round answers to one decimal
place. a. Compute the ratio of times - interest - earned. Answer times b. Compute the debt-to-equity ratio. Answer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc9b85d9c-d60f-4f64-b785-3b42d9bd0efb%2Fdd6b2264-b729-4317-b87b-4cd1aadfbbad%2Fri53i2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Long-Term Solvency Ratios Summary data from year-end financial statements of Palm Springs Company for the current
year follow. Summary Income Statement Data Sales $10, 500, 600 Cost of goods sold 6, 050,000 Selling expenses
685,000 Administrative expenses 945,000 Interest expense 783, 500 Income tax expense 427,791 8,891,291 Net
income $1,609,309 Summary Balance Sheet Data Cash $84, 700 Total liabilities $749,700 Noncash assets 885,500
Stockholders' equity 220, 500 Total assets $970, 200 Total liabilities and equity $970, 200 Round answers to one decimal
place. a. Compute the ratio of times - interest - earned. Answer times b. Compute the debt-to-equity ratio. Answer
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