The classified balance sheet and selected income statement data for Shreveport Auto, Inc., as of December 31, 2018, are presented next.

Selected Income Statement Data

Gross Profit.......................................................................$293,200Operating Expenses...........................................................173,100Earnings Before Interest and Taxes.................................120,100Interest Expense...................................................................17,500Income Tax Expense............................................................27,400Net Income............................................................................75,200

Requirements

1. Calculate Shreveport Auto, Inc.?s debt ratio and interest coverage ratio as of December 31, 2018. Round to two decimal places.

2. What percentage of Shreveport Auto, Inc.?s assets belong to the stockholders?

3. Would you be willing to extend credit to Shreveport Auto, Inc.? Why or why not?

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Shreveport Auto, Inc. Balance Sheet December 31, 2018 Current Assets: Current Liabilities: $ 6,600 3,900 $ 7,400 Accounts Payable Salaries Payable Cash Accounts Receivable 2,000 Supplies Prepaid Rent 400 Unearned Service Revenue 8,700 21,000 39,100 Note Payable Total Current Liabilities 9,000 Total Current Assets 19,900 Long-Term Debt: Mortgage Note Payable Bonds Payable Total Long-Term Debt Fixed Assets: Land 70,000 28,000 $ 38,000 Equipment 150,000 178,000 Less Accumulated Depreciation, Equipment 9,000 29,000 Stockholders' Equity: Building 225,000 Common Stock 22,000 14,800 Retained Earnings Less Accumulated 90,000 135,000 234,000 $253,900 Depreciation, Building Total Stockholders' Equity Total Liabilities and Stockholders' Equity 36,800 Total Fixed Assets $253,900 Total Assets