Cullumber Medical manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2015 and 2016 follow. Cullumber Medical Comparative Balance Sheet As of December 31 2016 2015 Assets Current assets Cash $402,000 $417,500 Accounts receivable, net 1,065,000 776,400 Inventory 758,000 681,000 Other current assets 362,000 247,000 Total current assets 2,587,000 2,121,900 Property, plant, & equipment, net 8,671,140 8,439,915 Total assets $11,258,140 $10,561,815 Liabilities and Stockholders' Equity Current liabilities $3,165,000 $2,846,000 Long-term debt 3,700,000 6,865,000 3,892,600 6,738,600 Total liabilities Liabilities and Stockholders' Equity Current liabilities $2,846,000 $3,165,000 3,700,000 Long-term debt 3,892,600 Total liabilities 6,865,000 6,738,600 Preferred stock, $5 par value 70,000 5 8,900 Common stock, $0.25 par value 129,000 103,900 Retained earnings 4,194,140 3,660,415 Total stockholders' equity 4,393,140 3,823,215 Total liabilities and stockholders' equity $11,258,140 $10,561,815 Cullumber Medical Comparative Income Statement and Statement of Retained Earnings For the Year 2016 2015 Sales revenue (all on account) Cost of goods sold Gross profit $10,177,250 5,611,700 4,565,550 2,840,200 1,725,350 $9,613,900 5,298,750 4,315,150 2,634,100 1,681,050 Operating expenses Net operating income Cunu DCI TVICurcan Comparative Income Statement and Statement of Retained Earnings For the Year 2016 2015 $9,613,900 Sales revenue (all on account) $10,177,250 Cost of goods sold 5,298,750 Gross profit 4,315,150 5,611,700 4,565,550 2,840,200 1,725,350 Operating expenses 2,634,100 1,681,050 Net operating income Interest expense 301,600 308,600 Net income before taxes 1,423,750 1,372,450 Income taxes (30%) 427,125 411,735 Net income $996,625 $960,715 Dividends paid Preferred dividends 29,500 29,550 Common dividends 433,400 413,100 Total dividends paid 462,900 442,650 Net income retained 533,725 518,065 Retained earnings, beginning of year 3,660,415 $4,194,140 3,142,350 $3,660,415 Retained earnings, end of year Income taxes (30%) 427,125 411,735 Net income $996,625 $960,715 Dividends paid Preferred dividends 29,500 29,550 Common dividends 433,400 413,100 Total dividends paid 462,900 442,650 Net income retained 533,725 518,065 Retained earnings, beginning of year 3,660,415 3,142,350 Retained earnings, end of year $4,194,140 $3,660,415 Calculate the following leverage ratios for 2016. (Round all answers to 2 decimal places, eg. 2.55% or 2.55.) Debt ratio 0.33 b. Debt-to-equity ratio 1.56 c. Times interest earned ratio 5.72 times e Textbook and Media
