The following information was available for the year ended December 31, 2019: Earnings before interest and taxes (operating income) Interest expense Income tax expense Net income Total assets at year-end Total liabilities at year-end $105,000 25,000 30,000 50,000 350,000 180,000 Required: a. Čalculate the debt ratio at December 31, 2019. (Round your answer to 1 decimal place.) b. Calculate the debt/equity ratio at December 31, 2019. (Round your answer to 2 decimal places.) c. Calculate the times interest earned for the year ended December 31, 2019. (Round your answer to 2 decimal places.)
The following information was available for the year ended December 31, 2019: Earnings before interest and taxes (operating income) Interest expense Income tax expense Net income Total assets at year-end Total liabilities at year-end $105,000 25,000 30,000 50,000 350,000 180,000 Required: a. Čalculate the debt ratio at December 31, 2019. (Round your answer to 1 decimal place.) b. Calculate the debt/equity ratio at December 31, 2019. (Round your answer to 2 decimal places.) c. Calculate the times interest earned for the year ended December 31, 2019. (Round your answer to 2 decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![The following information was available for the year ended December 31, 2019:
Earnings before interest and taxes (operating income)
Interest expense
Income tax expense
$105,000
25,000
30,000
50,000
350,000
Net income
Total assets at year-end
Total liabilities at year-end
180,000
Required:
a. Calculate the debt ratio at December 31, 2019. (Round your answer to 1 decimal place.)
b. Calculate the debt/equity ratio at December 31, 2019. (Round your answer to 2 decimal places.)
c. Calculate the times interest earned for the year ended December 31, 2019. (Round your answer to 2 decimal places.)
a. Debt ratio
b. Debt/Equity ratio
c. Times interest earned
%
times
times](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff7728c42-5e56-45c0-9286-e628eed9063d%2F4d4fd0b8-29b6-41cd-8fe4-8ab9bd117ad7%2Fn5thyw_processed.png&w=3840&q=75)
Transcribed Image Text:The following information was available for the year ended December 31, 2019:
Earnings before interest and taxes (operating income)
Interest expense
Income tax expense
$105,000
25,000
30,000
50,000
350,000
Net income
Total assets at year-end
Total liabilities at year-end
180,000
Required:
a. Calculate the debt ratio at December 31, 2019. (Round your answer to 1 decimal place.)
b. Calculate the debt/equity ratio at December 31, 2019. (Round your answer to 2 decimal places.)
c. Calculate the times interest earned for the year ended December 31, 2019. (Round your answer to 2 decimal places.)
a. Debt ratio
b. Debt/Equity ratio
c. Times interest earned
%
times
times
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