Ratios Analyzing Long-Term Firm SolvencyThe following information is available for Banner Company: Annual Data Current Year Previous Year Interest expense $85,000 $82,000 Income tax expense 203,500 185,000 Net income 496,500 425,000 Capital expenditures 320,000 380,000 Cash provided by operating activities 450,000 390,000 Year-End Data Dec. 31,Current Year Dec. 31,Previous Year Total liabilities $2,400,000 $1,900,000 Total stockholders’ equity 4,200,000 3,800,000 Calculate the following: Note: Round all answers to two decimal places. Current Year times-interest-earned ratio.Answer
Ratios Analyzing Long-Term Firm SolvencyThe following information is available for Banner Company: Annual Data Current Year Previous Year Interest expense $85,000 $82,000 Income tax expense 203,500 185,000 Net income 496,500 425,000 Capital expenditures 320,000 380,000 Cash provided by operating activities 450,000 390,000 Year-End Data Dec. 31,Current Year Dec. 31,Previous Year Total liabilities $2,400,000 $1,900,000 Total stockholders’ equity 4,200,000 3,800,000 Calculate the following: Note: Round all answers to two decimal places. Current Year times-interest-earned ratio.Answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Ratios Analyzing Long-Term Firm Solvency
The following information is available for Banner Company:
| Annual Data | Current Year | Previous Year |
|---|---|---|
| Interest expense | $85,000 | $82,000 |
| Income tax expense | 203,500 | 185,000 |
| Net income | 496,500 | 425,000 |
| Capital expenditures | 320,000 | 380,000 |
| Cash provided by operating activities | 450,000 | 390,000 |
| Year-End Data | Dec. 31, Current Year |
Dec. 31, Previous Year |
|---|---|---|
| Total liabilities | $2,400,000 | $1,900,000 |
| Total |
4,200,000 | 3,800,000 |
Calculate the following:
Note: Round all answers to two decimal places.
Current Year times-interest-earned ratio.
Answer
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