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Joe manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2019 and 2020 follow. Sheridan Medical Comparative Balance

Joe manufactures hospital beds and other institutional furniture. The company's comparative balance sheet and income statement for 2019 and 2020 follow.

Sheridan Medical Comparative Balance Sheet As of December 31
2020 2019
Assets
Current assets
Cash $391,000 $417,400
Accounts receivable, net 1,018,000 776,500
Inventory 720,000 681,050
Other current assets 381,350 247,050
Total current assets 2,510,350 2,122,000
Property, plant, & equipment, net 8,717,185 8,440,050
Total assets $11,227,535 $10,562,050
Liabilities and Stockholders' Equity
Current liabilities $3,167,000 $2,846,100
Long-term debt 3,702,600 3,892,700
Total liabilities 6,869,600 6,738,800
Preferred stock, $5 par value 58,950 58,950
Common stock, $0.25 par value 104,650 103,900
Retained earnings 4,194,335 3,660,400
Total stockholders' equity 4,357,935 3,823,250
Total liabilities and stockholders' equity $11,227,535 $10,562,050
Sheridan Medical Comparative Income Statement and Statement of Retained Earnings For the Year
2020 2019
Sales revenue (all on account) $10,177,250 $9,614,000
Cost of goods sold 5,612,650 5,298,700
Gross profit 4,564,600 4,315,300
Operating expenses 2,840,250 2,634,150
Net operating income 1,724,350 1,681,150
Interest expense 300,300 308,650
Net income before taxes 1,424,050 1,372,500
Income taxes (30%) 427,215 411,750
Net income $996,835 $960,750
Common dividends 433,450 413,100
Total dividends paid 462,900 442,650
Net income retained 533,935 518,100
Retained earnings, beginning of year 3,660,400 3,142,300
Retained earnings, end of year $4,194,335 $3,660,400

Calculate the following leverage ratios for 2020. (Round all answers to 2 decimal places, e.g. 2.55% or 2.55.)

a. Debt ratio

44 right

%

b. 8.9 wrong
c. Times interest earned ratio

25.4 wrong

times

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