Question
Question (2) The following information is computed from the National Cement Company annual report for 2020 and 2019. 2020 2019 Current assets $ 2,731,020 $
Question (2)
The following information is computed from the National Cement Company annual report for 2020 and 2019.
| 2020 | 2019 |
Current assets | $ 2,731,020 | $ 2,364,916 |
Property and equipment, net | 10,960,286 | 8,516,833 |
Intangible assets, at cost less applicable amortization |
294,775 |
255,919 |
Total Assets | $13,986,081 | $11,137,668 |
Current liabilities | $ 3,168,123 | $ 2,210,735 |
Deferred income taxes | 160,000 | 26,000 |
Mortgage note payable | 456,000 | |
Stockholders' equity | 10,201,958 | 8,900,933 |
Total liabilities & Stockholders' equity | $13,986,081 | $11,137,668 |
Net sales | $33,410,599 | $25,804,285 |
Cost of goods sold | (30,168,715) | (23,159,745 |
Selling and administrative expense | (2,000,000) | (1,500,000) |
Interest expense | (216,936) | (39,456) |
Income tax expense | (400,000) | (300,000) |
Net income | $ 624,948 | $ 805,084 |
Required: (LO# 1,2)
Based on the above data for both years, compute:
times interest earned
fixed charge
debt ratio
debt/equity ratio
Comment on the firm's long-term borrowing ability based on the analysis.
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