Question
3. The following information was available for the year ended December 31, 2013: Earnings before interest and taxes (operating income) $ 75,000 Net income $
3.
| The following information was available for the year ended December 31, 2013: |
| Earnings before interest and taxes (operating income) | $ | 75,000 | Net income | $ | 40,000 | |
| Interest expense | 15,000 | Total assets at year-end | 250,000 | |||
| Income tax expense | 20,000 | Total liabilities at year-end | 140,000 |
| Required: | |
| a. | Calculate the debt ratio at December 31, 2013.(Round your answer to 1 decimal place.) |
| Debt ratio: ____________% |
| b. | Calculate the debt/equity ratio at December 31, 2013.(Round your answer to 2 decimal places.) |
| Debt/equity ratio: _________ times |
| c. | Calculate the times interest earned for the year ended December 31, 2013.(Round your answer to 2 decimal places.) |
Times interest earned: __________ times |
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Accounting Principles
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt
IFRS global edition
1-119-41959-4, 470534796, 9780470534793, 9781119419594 , 978-1119419617
