Paddy’s Pub reported the following year-end data: income before interest expense and income tax expense of $30,000; cost of goods sold of $17,000; interest expense of $1,500; total assets of $70,000; total liabilities of $20,000; and total equity of $50,000. Compute the (a) debt-to-equity ratio and (b) times interest earned. Round to one decimal.
Paddy’s Pub reported the following year-end data: income before interest expense and income tax expense of $30,000; cost of goods sold of $17,000; interest expense of $1,500; total assets of $70,000; total liabilities of $20,000; and total equity of $50,000. Compute the (a) debt-to-equity ratio and (b) times interest earned. Round to one decimal.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Paddy’s Pub reported the following year-end data: income before interest expense and income tax expense
of $30,000; cost of goods sold of $17,000; interest expense of $1,500; total assets of $70,000; total liabilities
of $20,000; and total equity of $50,000. Compute the (a) debt-to-equity ratio and (b) times interest
earned. Round to one decimal.
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