Times-Interest-Earned Ratio, Debt Ratio, Debt-to-Equity Ratio Juroe Company provided the following income statement for last year: Sales $12,200,000 7,400,000 Cost of goods sold Gross margin Operating expenses Operating income Interest expense Income before taxes Income taxes Net income $4,800,000 2,800,000 $2,000,000 600,000 $1,400,000 670,000 $730,000 Juroe's balance sheet as of December 31 last year showed total liabilities of $2,560,000, total equity of $9,370,000, and total assets of $11,930,000. Required: Round answers to two decimal places. 1. Calculate the times-interest-earned ratio. 1.7 X times 2. Calculate the debt ratio. 0.21 3. Calculate the debt-to-equity ratio. 0.27

Times-Interest-Earned Ratio, Debt Ratio, Debt-to-Equity Ratio Juroe Company provided the following income statement for last year: Sales $12,200,000 7,400,000 Cost of goods sold Gross margin Operating expenses Operating income Interest expense Income before taxes Income taxes Net income $4,800,000 2,800,000 $2,000,000 600,000 $1,400,000 670,000 $730,000 Juroe's balance sheet as of December 31 last year showed total liabilities of $2,560,000, total equity of $9,370,000, and total assets of $11,930,000. Required: Round answers to two decimal places. 1. Calculate the times-interest-earned ratio. 1.7 X times 2. Calculate the debt ratio. 0.21 3. Calculate the debt-to-equity ratio. 0.27

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 51E: Juroe Company provided the following income statement for last year: Juroes balance sheet as of...

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Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: 1. Calculate the return on sales. (Note: Round the percent to two decimal places.) 2. CONCEPTUAL CONNECTION Briefly explain the meaning of the return on sales ratio, and comment on whether Juroes return on sales ratio appears appropriate.
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