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The president of Rodrigez, Inc., has asked you to gather some statistics about his corporation's solvency. You have compiled the following data: Profit = 900,000 Income Tax Rate = 35% Interest Expense =100,000 Total Liabilities = 2,048,000 Total Equity = 4,352,000   Using these data, calculate: 1. Times interest earned ratio 2. Debit ratio 3. Equity ratio

The president of Rodrigez, Inc., has asked you to gather some statistics about his corporation's solvency. You have compiled the following data: Profit = 900,000 Income Tax Rate = 35% Interest Expense =100,000 Total Liabilities = 2,048,000 Total Equity = 4,352,000   Using these data, calculate: 1. Times interest earned ratio 2. Debit ratio 3. Equity ratio

FINANCIAL ACCOUNTING
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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Problem 2 (Solvency Ratios)

The president of Rodrigez, Inc., has asked you to gather some statistics about his corporation's solvency. You have compiled the following data:

Profit = 900,000

Income Tax Rate = 35%

Interest Expense =100,000

Total Liabilities = 2,048,000

Total Equity = 4,352,000

 

Using these data, calculate:
1. Times interest earned ratio
2. Debit ratio
3. Equity ratio

Please provide a solution.

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