Buhler Industries Inc.'s financial statements contain the following selected data (in thousands): ______________________________ 2012 ___________________ 2011 Total
Question:
Buhler Industries Inc.'s financial statements contain the following selected data (in thousands):
______________________________ 2012 ___________________ 2011
Total assets .............................$250,755 ..................... $241,733
Total liabilities ...........................89,830 .....................97,171
Profit .......................................16,363 .....................11,917
Income tax expense .......................3,278 ..................... 3,623
Interest expense ...........................3,507 ..................... 3,004
Instructions
(a) Calculate the debt to total assets and times interest earned ratios for 2012 and 2011. Did Buhler's solvency improve or deteriorate in 2012?
(b) The notes to Buhler's financial statements show that the company has an operating line of credit (credit facility) with the Bank of Montreal for $60 million that can be drawn on at any time and repaid at any time. Over $13 million of this credit facility has been drawn on. What does this mean and how is this shown in the financial statements?
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Solvency
Solvency means the ability of a business to fulfill its non-current financial liabilities. Often you have heard that the company X went insolvent, this means that the company X is no longer able to settle its noncurrent financial... Line of Credit
A line of credit (LOC) is a preset borrowing limit that can be used at any time. The borrower can take money out as needed until the limit is reached, and as money is repaid, it can be borrowed again in the case of an open line of credit. A LOC is...
Step by Step Answer:
in thousands a 2011 Debt to total assets 97171 402 241733 Times interest earned 11917 3623 3004 62 t...View the full answer
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118644942
6th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine
