Long-term solvency ratiosTotal debt ratioDebt-equity ratioEquity multiplierTimes interest earned ratiocash coverage ratioProfitability ratiosProfit marginROAROE Balance SheetsLiabilities and Owners'AssetsEquity2020202120202021Current AssetsCurrent liabilities$32,653 $$16,911 $2$34,495 $$84,059 $Accounts payableNotes payable$34,886 $$18,058 $2$18,871 $$71,815 $$110,000 $Cash39,35044,285Accounts receivable28,87716,848Inventory44,336Other25,619Total112,563Total86,752Long-term debtOwners' equityCommon stock and pai $Accumulated retained $140,000Fixed assetsNet plant and equipment $441,099 $55,000 $288,343 $502,87255,000333,683Total$343,343 $388,683Total liabilities andTotal assets525,158 $615,435owners' equity24525,158 $615,4352019 Income StatementSales$531,750Costs of goods soldDepreciation377,294$46,686Earnings before interestand taxes107,770Interest paid20,650Taxable income87,120Texes (25%)21,780Net income$65,340Dividends20,000Retained earnings45,340

Long-term solvency ratio:- It is calculated to check the firm's long-term ability to meet its…

Answered: Long-term solvency ratios Total debt…

Long-term solvency ratios Total debt ratio Debt-equity ratio Equity multiplier Times interest earned ratio cash coverage ratio

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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Question

Long-term solvency ratios
Total debt ratio
Debt-equity ratio
Equity multiplier
Times interest earned ratio
cash coverage ratio
Profitability ratios
Profit margin
ROA
ROE

Balance Sheets
Liabilities and Owners'
Assets
Equity
2020
2021
2020
2021
Current Assets
Current liabilities
$
32,653 $
$
16,911 $
2$
34,495 $
$
84,059 $
Accounts payable
Notes payable
$
34,886 $
$
18,058 $
2$
18,871 $
$
71,815 $
$
110,000 $
Cash
39,350
44,285
Accounts receivable
28,877
16,848
Inventory
44,336
Other
25,619
Total
112,563
Total
86,752
Long-term debt
Owners' equity
Common stock and pai $
Accumulated retained $
140,000
Fixed assets
Net plant and equipment $
441,099 $
55,000 $
288,343 $
502,872
55,000
333,683
Total
$
343,343 $
388,683
Total liabilities and
Total assets
525,158 $
615,435
owners' equity
24
525,158 $
615,435
2019 Income Statement
Sales
$
531,750
Costs of goods sold
Depreciation
377,294
$
46,686
Earnings before interest
and taxes
107,770
Interest paid
20,650
Taxable income
87,120
Texes (25%)
21,780
Net income
$
65,340
Dividends
20,000
Retained earnings
45,340

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