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Required: Using the information provided above, compute the following for both years. Round your answers to two decimal places. A. Debt-to-equity ratio (at each year-end) Year 2 Year 1 B. Times-interest-earned ratio Year 2 times times Year 1

Required: Using the information provided above, compute the following for both years. Round your answers to two decimal places. A. Debt-to-equity ratio (at each year-end) Year 2 Year 1 B. Times-interest-earned ratio Year 2 times times Year 1

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Smith Inc. is a retailer of snow skiing gear. During Year 2, Smith expanded its retail business by adding over 50 shops. The following information is obtained from the comparative financial statements included in the company's current annual report: Dec. 31. Year 2 Dec. 31. Year 1 $26,000,000 $18,000,000 34,000,000 38,000,000 Total liabilities Total stockholders' equity FOR THE FISCAL YEARS ENDED Depreciation expense Interest expense Income tax expense Net income Net cash provided by operations Total dividends paid Cash used to purchase plant assets Payments on long-term debt Required: Dec. 31, Year 2 $2,000,000 3,400,000 12,600,000 6,000,000 41,000,000 2,000,000 32,000,000 1,600,000 Year 1 Dec. 31, Year 1 $6,000,000 3,200,000 18,100,000. 15,000,000 (400,000) 12,000,000 18,000,000 1,800,000 Using the information provided above, compute the following for both years Round your answers to two decimal places.. A. Debt-to-equity ratio (at each year-end) Year 2
Transcribed Image Text:Smith Inc. is a retailer of snow skiing gear. During Year 2, Smith expanded its retail business by adding over 50 shops. The following information is obtained from the comparative financial statements included in the company's current annual report: Dec. 31. Year 2 Dec. 31. Year 1 $26,000,000 $18,000,000 34,000,000 38,000,000 Total liabilities Total stockholders' equity FOR THE FISCAL YEARS ENDED Depreciation expense Interest expense Income tax expense Net income Net cash provided by operations Total dividends paid Cash used to purchase plant assets Payments on long-term debt Required: Dec. 31, Year 2 $2,000,000 3,400,000 12,600,000 6,000,000 41,000,000 2,000,000 32,000,000 1,600,000 Year 1 Dec. 31, Year 1 $6,000,000 3,200,000 18,100,000. 15,000,000 (400,000) 12,000,000 18,000,000 1,800,000 Using the information provided above, compute the following for both years Round your answers to two decimal places.. A. Debt-to-equity ratio (at each year-end) Year 2
Required: Using the information provided above, compute the following for both years. Round your answers to two decimal places. A. Debt-to-equity ratio (at each year-end) Year 2 Year 1 B. Times-interest-earned ratio Year 2 times times Year 1
Transcribed Image Text:Required: Using the information provided above, compute the following for both years. Round your answers to two decimal places. A. Debt-to-equity ratio (at each year-end) Year 2 Year 1 B. Times-interest-earned ratio Year 2 times times Year 1
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