is, what does a debt ratio of 0.30 mean? A) Each dollar in sales generates 30 cents in net income B) Each dollar in assets generates 30 cents in sales C) 30 cents of each dollar in liabilities is financed by assets D) 30 cents of each dollar in assets is financed by liabilities Question 26 (3.3 points) Use the following information for this question: Little Gorilla, Inc. Year 2 Income Statement (S in million) Sales $9,625 Less: Cost of goods sold 5,225 Less: Depreciation 1,890 Earnings Before interest and taxes 2,510 Less: Interest paid 850 Taxable income 1,660 Less: Taxes 581 Net income $1,079 Dividends paid 400 $679 Addition to retained earnings Year Land Year 2 Balance Sheet (S in million) Year 1 Year 2 Year 1 Year 2 Cash $1,455 $260 Accounts payable Accounts rec." 2,460 3,975 Notes payable Inventory 1.405 885 Total $1,150 $2,863 2.600 1.628 $3,750 $4,491 Total $5,320 $5,120 Long-term debt 7,000 7,600 Net fixed assets 19.300 21.720 Common stock 5,500 5,700 Total assets $24,620 $26,840 Accounts rec.: Accounts receivables Retained earnings 8,370 9.049 Total liabilities and Equity $24.620 $26,840 What is the fixed asset turnover for Year 2? Inventory Total 1.405 Total $5,320 $5,120 Long-term debt Common stock Net fixed assets 19.300 21.720 Total assets $24,620 $26,840 Accounts rec.: Accounts receivables $3,750 7,000 7,600 5,500 5,700 Retained earnings 8,370 9.049 Total liabilities and Equity $24.620 $26.840 What is the fixed asset turnover for Year 2? A) 0.44 B) 0.50 C) 0.39 D) 0.36